Home » Blog » Credit Card Processing » How To Choose A Merchant Service Provider: 7 Things To Look For Cost isn't the only thing you should consider when choosing a merchant service provider. Here's what to look for before signing up. WRITTEN & RESEARCHED BY Shannon Vissers Shannon has been writing for Merchant Maverick about small business software and financing since 2015. She started writing professionally about business topics in 2005. Shannon has been featured in the Washington Post, Reader's Digest, US News, MSN, Yahoo Finance, Business Insider, and other publications. She has a bachelor's degree in English from San Diego State University and currently resides in San Diego, California. Expert Contributor Last updated on Updated July 19, 2026 WRITTEN & RESEARCHED BY Expert Contributor Last updated on Updated July 19, 2026 REVIEWED BY Erica Seppala Erica has been writing about small business finance and technology since 2008. She joined Merchant Maverick in 2018 and specializes in researching and reviewing business software, financial products, and other topics to help small businesses manage and grow their operations. Her expertise has been cited in MSN, Reader's Digest, Vox, U.S. News & World Report, and Real Simple. She is a Certified ProAdvisor for QuickBooks Online and QuickBooks Payroll, a graduate of Limestone University, and currently resides in Greenville, South Carolina. Editor & Senior Staff Writer Editor & Senior Staff Writer Compare the provider’s hardware, software, pricing model, fees, and support before opening an account. Review the full contract for automatic renewals, early termination fees, processing limits, and other restrictions. Focus on total cost and transparency rather than choosing a provider based only on its advertised processing rate. We’ve identified seven key factors to consider when choosing a merchant services provider to accept credit cards at your business. Each can affect your costs, contract, and overall experience, so evaluate all seven before signing up with a provider. Table of Contents 7 Things To Look For In A Merchant Service Provider Questions To Ask A Merchant Account Provider The Bottom Line On How To Choose A Merchant Service Provider 7 Things To Look For In A Merchant Service Provider Choosing the right provider involves more than comparing processing rates. You’ll also need to evaluate equipment, software, fees, contracts, sales practices, and customer support. Here are seven important factors to consider before signing up. Every business needs some type of equipment to accept payments. Your exact hardware needs will depend on whether you sell in person, online, or on the go. Mobile Card Readers Mobile card readers connect to a smartphone or tablet and allow businesses to accept payments from almost anywhere. They’re especially useful for service businesses, market vendors, food trucks, and other mobile sellers. Look for a reader that supports EMV chip cards, contactless cards, and mobile wallets. Mobile card readers connect to a smartphone or tablet and allow businesses to accept payments from almost anywhere. They’re especially useful for service businesses, market vendors, food trucks, and other mobile sellers. Look for a reader that supports EMV chip cards, contactless cards, and mobile wallets. Countertop Terminals Countertop credit card terminals are a reliable option for businesses with a fixed checkout location. Modern terminals generally support EMV chip cards, NFC payments, and traditional card swipes. Buying equipment outright is usually preferable to leasing, since terminal leases can be expensive and may include long-term contracts. Countertop credit card terminals are a reliable option for businesses with a fixed checkout location. Modern terminals generally support EMV chip cards, NFC payments, and traditional card swipes. Buying equipment outright is usually preferable to leasing, since terminal leases can be expensive and may include long-term contracts. A POS system combines payment processing with tools for tracking sales, inventory, customers, employees, and other business data. POS hardware can range from a tablet and card reader to a complete countertop system with customer displays, receipt printers, and barcode scanners. Compare hardware compatibility, software costs, and industry-specific features before choosing a system. See our best small business POS article for more specific recommendations. A POS system combines payment processing with tools for tracking sales, inventory, customers, employees, and other business data. POS hardware can range from a tablet and card reader to a complete countertop system with customer displays, receipt printers, and barcode scanners. Compare hardware compatibility, software costs, and industry-specific features before choosing a system. See our best small business POS article for more specific recommendations. The right software will depend on how and where you accept payments. Some businesses only need a simple way to enter transactions, while others need tools for online sales, inventory, reporting, and customer management. Virtual Terminal A virtual terminal lets you process payments through a computer or web browser. You can manually enter card information for phone or mail orders, and some systems also support connected card readers for in-person payments. Virtual terminals are especially useful for businesses that take remote payments but don’t need a full eCommerce website. A virtual terminal lets you process payments through a computer or web browser. You can manually enter card information for phone or mail orders, and some systems also support connected card readers for in-person payments. Virtual terminals are especially useful for businesses that take remote payments but don’t need a full eCommerce website. Payment Gateway A payment gateway securely sends transaction information between your website, payment processor, and the customer’s bank. Online businesses need a gateway that works with their website or eCommerce platform. Compare supported integrations, security features, recurring billing tools, and gateway fees. A payment gateway securely sends transaction information between your website, payment processor, and the customer’s bank. Online businesses need a gateway that works with their website or eCommerce platform. Compare supported integrations, security features, recurring billing tools, and gateway fees. Shopping cart software lets customers browse products, add items to an order, and complete checkout through your website. Some eCommerce platforms include the shopping cart, website builder, payment gateway, and inventory tools in one system. Others allow you to add a third-party shopping cart to an existing website. Shopping cart software lets customers browse products, add items to an order, and complete checkout through your website. Some eCommerce platforms include the shopping cart, website builder, payment gateway, and inventory tools in one system. Others allow you to add a third-party shopping cart to an existing website. POS software helps in-person businesses process payments and manage daily operations. Depending on the system, features may include inventory tracking, sales reporting, customer profiles, employee management, and loyalty programs. Look for software that fits your industry, integrates with your preferred hardware, and includes the features you’ll actually use. POS software helps in-person businesses process payments and manage daily operations. Depending on the system, features may include inventory tracking, sales reporting, customer profiles, employee management, and loyalty programs. Look for software that fits your industry, integrates with your preferred hardware, and includes the features you’ll actually use. 3. Merchant Account Fees Before choosing a merchant services provider, review every account fee and confirm what you receive in return. A reasonable fee should cover a useful service, while all charges should be clearly disclosed before you sign a contract. Some providers publish their fees online, but others only disclose them in a quote or contract. Read the full agreement carefully and ask about any charge you don’t understand. Common Merchant Account Fees Setup Or Application Fees: Some providers charge a one-time fee to open or underwrite your account. These fees are less common than they once were, so compare providers before agreeing to pay one. Monthly Or Annual Account Fees: Providers may charge a recurring fee for maintaining your account or bundling services such as reporting, PCI compliance assistance, a virtual terminal, or customer support. Consider whether the included services justify the cost. Monthly Minimums: A monthly minimum requires you to generate a certain amount in processing fees each month. If you fall short, you pay the difference. These requirements can be costly for new, seasonal, or low-volume businesses. PCI Compliance Fees: Some providers charge for PCI compliance tools, questionnaires, or security scans, while others include these services in another account fee. PCI noncompliance fees may apply if you fail to complete the required steps, so make sure you understand how to maintain compliance. Statement & Miscellaneous Fees: Your statement may include charges for paper statements, online reporting, batch processing, regulatory programs, or other account services. Small fees can add up, so request a complete fee schedule. Early Termination Fees: Providers with long-term contracts may charge a fee if you close your account before the contract ends. Look for month-to-month billing or a written waiver of the early termination fee whenever possible. Chargeback Fees: A chargeback occurs when a cardholder disputes a transaction through the card issuer. Most processors charge a fee when a chargeback is filed, even if you later win the dispute. Review both the fee and the provider’s dispute-management process. Setup Or Application Fees: Some providers charge a one-time fee to open or underwrite your account. These fees are less common than they once were, so compare providers before agreeing to pay one. Monthly Or Annual Account Fees: Providers may charge a recurring fee for maintaining your account or bundling services such as reporting, PCI compliance assistance, a virtual terminal, or customer support. Consider whether the included services justify the cost. Monthly Minimums: A monthly minimum requires you to generate a certain amount in processing fees each month. If you fall short, you pay the difference. These requirements can be costly for new, seasonal, or low-volume businesses. PCI Compliance Fees: Some providers charge for PCI compliance tools, questionnaires, or security scans, while others include these services in another account fee. PCI noncompliance fees may apply if you fail to complete the required steps, so make sure you understand how to maintain compliance. Statement & Miscellaneous Fees: Your statement may include charges for paper statements, online reporting, batch processing, regulatory programs, or other account services. Small fees can add up, so request a complete fee schedule. Early Termination Fees: Providers with long-term contracts may charge a fee if you close your account before the contract ends. Look for month-to-month billing or a written waiver of the early termination fee whenever possible. Chargeback Fees: A chargeback occurs when a cardholder disputes a transaction through the card issuer. Most processors charge a fee when a chargeback is filed, even if you later win the dispute. Review both the fee and the provider’s dispute-management process. 4. Processing Fees Processing fees include several components. Interchange fees go to the card-issuing bank, card networks charge separate assessment fees, and the processor or merchant services provider adds its own markup. Providers use different pricing models to pass these costs on to merchants. Understanding the model and calculating your effective rate can help you compare offers more accurately. Interchange-Plus Pricing Interchange-plus pricing separates the underlying interchange and card-network costs from the provider’s markup. A quote may be expressed as interchange plus a percentage and a fixed per-transaction fee. Because the processor’s markup is clearly identified, interchange-plus is generally one of the most transparent pricing models and can be cost-effective for established businesses. Interchange-plus pricing separates the underlying interchange and card-network costs from the provider’s markup. A quote may be expressed as interchange plus a percentage and a fixed per-transaction fee. Because the processor’s markup is clearly identified, interchange-plus is generally one of the most transparent pricing models and can be cost-effective for established businesses. Tiered pricing groups transactions into categories such as qualified, mid-qualified, and non-qualified. The rate charged depends on factors such as the card type and how the transaction is processed. Providers often advertise the lowest qualified rate, while many transactions are charged at higher tiers. Because the qualification rules and processor markup can be difficult to evaluate, tiered pricing is usually less transparent than other models. Tiered pricing groups transactions into categories such as qualified, mid-qualified, and non-qualified. The rate charged depends on factors such as the card type and how the transaction is processed. Providers often advertise the lowest qualified rate, while many transactions are charged at higher tiers. Because the qualification rules and processor markup can be difficult to evaluate, tiered pricing is usually less transparent than other models. Flat-Rate Pricing Flat-rate pricing charges a set percentage and, in many cases, a fixed fee for each transaction. Rates may differ for in-person, online, and manually entered payments. This model is simple and predictable, and providers often charge fewer recurring account fees. However, the per-transaction rate may be higher than interchange-plus pricing, particularly for businesses with higher processing volumes. Flat-rate pricing charges a set percentage and, in many cases, a fixed fee for each transaction. Rates may differ for in-person, online, and manually entered payments. This model is simple and predictable, and providers often charge fewer recurring account fees. However, the per-transaction rate may be higher than interchange-plus pricing, particularly for businesses with higher processing volumes.

Your effective rate is the total amount you pay in processing costs divided by your total card sales, expressed as a percentage. For example, if you pay $300 in processing costs on $10,000 in card sales, your effective rate is 3%. Use your effective rate to compare the overall cost of different providers, but remember that card types, transaction methods, sales volume, average ticket size, and business risk can all affect the result. Your effective rate is the total amount you pay in processing costs divided by your total card sales, expressed as a percentage. For example, if you pay $300 in processing costs on $10,000 in card sales, your effective rate is 3%. Use your effective rate to compare the overall cost of different providers, but remember that card types, transaction methods, sales volume, average ticket size, and business risk can all affect the result. 5. Sales & Advertising Transparency A provider’s website and sales process can reveal a lot about how it treats merchants. Be cautious of companies that advertise unusually low rates without explaining which transactions qualify or disclosing additional fees. Signs of a transparent provider include: Clearly disclosed processing rates and account fees Straightforward explanations of pricing and contract terms Educational resources and a detailed support center Multiple ways to contact customer service No misleading “rates as low as” or lowest-rate guarantees Verifiable merchant reviews or testimonials You should also ask whether your sales representative works directly for the provider or is an independent agent. Independent agents are not automatically untrustworthy, but sales practices and contract terms may vary. Get every rate, fee, equipment promise, and contract waiver in writing before opening an account. 6. Contract Length Before signing up with a merchant services provider, review the contract length, cancellation policy, and renewal terms carefully. Long-term agreements may include: Automatic Renewals : The contract may renew unless you cancel within a specific notice period. Early Termination Fees: You may be charged for closing the account before the contract ends. Liquidated Damages : Some agreements require you to pay estimated future fees for the remaining contract term. Month-to-month agreements generally offer more flexibility and make it easier to switch providers. When a long-term contract is required, ask whether the early termination fee can be waived and get any changes in writing. 7. Customer Service & Support Reliable support is essential when payment issues affect your ability to make sales. Before choosing a provider, review both its customer service channels and the quality of its self-service resources. Phone, email, and live chat support Support hours that match your business schedule A detailed knowledge base or help center Assistance with chargebacks, billing questions, and technical issues A dedicated account representative, if available Keep in mind that 24/7 support does not always guarantee fast or knowledgeable assistance. Check recent merchant reviews to see how effectively the provider resolves problems. Questions To Ask A Merchant Account Provider Before signing up, ask the provider: How quickly do you replace faulty hardware? Find out what support is available and how long you could be unable to process in-person payments. Are there transaction or monthly processing limits? Confirm whether the provider caps individual purchases or your total monthly volume. How quickly will I receive my funds? Ask about standard deposit times, faster-funding options, and any related fees. What is the daily batch cutoff? Transactions submitted after the cutoff may not begin processing until the following business day. What fees will appear on my statement? Request a complete written fee schedule, including account, PCI, chargeback, gateway, and cancellation fees. What are the contract and cancellation terms? Confirm the agreement length, renewal policy, notice requirements, and any early termination fee. You may also be able to negotiate rates , waive certain fees, or secure better contract terms before opening the account. The Bottom Line On How To Choose A Merchant Service Provider The right provider depends on your business size, sales volume, payment methods, and support needs. Small or low-volume businesses may prefer a simple payment service provider with flat-rate pricing and few monthly fees. Higher-volume or more complex businesses may benefit from a full merchant account with customized pricing, advanced features, and more hands-on support. Compare the total cost, contract terms, hardware, software, and customer service before making a decision. Our guide to the best credit card processing companies can help you find reputable providers to consider. Shannon Vissers @ShannonVissers Latest posts by Shannon Vissers ( see all ) Helcim vs Stripe: Comparison - January 23, 2025 Payment Nerds Review - December 11, 2024 Wave Payments Review - October 31, 2024 U.S. Bank Merchant Services Review - October 1, 2024 Tap To Pay: A Guide For Merchants - August 29, 2024 10 Things To Look For In A Credit Card Reader How To Choose A Credit Card Machine Or Payment Terminal Best Credit Card Processing Companies Best Credit Card Readers For Small Business A Visual Guide To Credit Card Processing Fees & Rates " * " indicates required fields Questions, Comments, Feedback ? " * " indicates required fields Questions, Comments, Feedback ? 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