Credit card processing is one of the biggest hidden expenses for many businesses. Whether you run an ecommerce store, retail shop, service-based business, or subscription company, every transaction takes a percentage of your revenue.
The problem is not just paying processing fees. The real problem is overpaying.
Many business owners sign up with providers like Stripe, Square, or PayPal without realizing there may be lower-cost alternatives available based on their business model, processing volume, or risk profile.
If you are looking for low cost credit card processing, this guide explains:
How payment processing fees actually work
How to find the cheapest payment processor
How to reduce transaction costs
What to avoid when comparing providers
When ACH payments may save you even more money
How to choose the best setup for your business
At Zen Payments, we help businesses lower processing costs by matching them with the right merchant account, payment gateway, virtual terminal, or ACH solution.
Want a lower processing quote? Contact us toget a custom pricing review and compare rates with no obligation.
What Is Low Cost Credit Card Processing?
Low cost credit card processing means reducing the fees you pay every time a customer makes a payment. Understanding merchant service fees is one of the most important steps in lowering your overall payment processing costs.
These fees typically include:
Interchange fees
Assessment fees
Processor markup
Monthly account fees
Gateway fees
Chargeback fees
The cheapest payment processor is not always the one advertising the lowest rate.
A provider offering 2.2% plus $0.30 may end up costing more than one offering interchange-plus pricing with lower markups.
That is why understanding the full cost structure of your merchant account is essential before choosing a payment processor.
How Credit Card Processing Fees Work
To find the least expensive credit card processing, you need to understand the three main layers of fees.
1. Interchange Fees
Interchange is the fee charged by card networks.
This is non-negotiable.
Major payment networks include:
Visa Inc.
Mastercard Incorporated
American Express Company
Discover Financial Services
2. Processor Markup
This is where pricing varies most.
Some processors add:
Flat-rate pricing
Tiered pricing
Interchange plus pricing
Interchange plus is often the best model for businesses processing over $10,000 per month.
3. Extra Fees
Watch for:
PCI compliance fees
Monthly minimums
Statement fees
Batch fees
Early termination fees
These hidden costs can make a "cheap" processor expensive.
Larger ticket businesses may qualify for lower percentage-based fees.
Card Present vs Card Not Present (CNP)
CNP transactions often cost more for merchants due to having a significantly higher fraud and chargeback risk.
Examples:
Ecommerce
Phone orders
Invoicing
Virtual terminal payments
Businesses selling online often need an ecommerce merchant account to manage higher fraud risk, recurring transactions, and customer-not-present payments.
Affordable Credit Card Processing for Small Businesses
Small businesses often overpay because they use simple plug-and-play platforms.
While convenience is nice, lower-cost merchant services often offer:
Better custom pricing
Lower per-transaction costs
ACH integration
Chargeback support
Higher approval rates
If you are searching for:
best credit card processor for small business
cheapest credit card processing small business
best merchant accounts for small businesses
you should compare:
Flat-rate providers
Traditional merchant accounts
ACH payment options
Virtual terminal solutions
Running a small business? Compare your current fees with a custom quote.
Low-Cost Mobile Credit Card Processing Options
Mobile payments are growing quickly, but costs vary.
Businesses using:
mobile phone credit card processing
portable readers
cell phone payment apps
should evaluate:
Swipe rates
Keyed-in rates
Hardware costs
Mobile app fees
The best mobile credit card processors should offer:
Fast deposits
Transparent pricing
Chargeback tools
Low hardware costs
This matters for:
Contractors
Service businesses
Pop-up retail
Event vendors
How to Lower Costs with Virtual Terminals
A virtual terminal lets you process payments from any browser.
This is ideal for:
Phone orders
Invoices
Remote billing
B2B sales
Benefits:
Lower hardware costs
Easier recurring billing
Better flexibility
Faster setup
If you manually process payments, pairing a MOTO merchant account with the right virtual terminal can reduce overhead, improve payment security, and streamline phone and mail order transactions.
How ACH Can Lower Processing Costs
One of the best ways to lower costs is switching certain transactions to ACH.
Taylor Stika is the CEO and Founder of Zen Payments. With a background in the payment processing industry starting in 2015, Taylor has extensive experience in managing and optimizing payment systems. Under his leadership, Zen Payments has grown and developed into a reputable provider of high and low-risk payment.
Our merchant service specialists are the best in the business and will work with you from start to finish to get your account approved!
High Approval Rates
Expansive Network of Banks
Versatile Solutions
Quick Approvals
Frequently Asked Questions
Interchange-plus pricing is typically the most transparent option, as it separates card network interchange fees from the processor’s markup. This model helps businesses understand their costs and is often more cost-effective than flat-rate or tiered pricing, especially for higher monthly volumes. Ask your payment processor to explain their pricing structure before signing an agreement.
Many payment processors advertise low transaction rates but offset them with monthly account fees, PCI compliance fees, statement fees, gateway fees, or monthly minimums. Before choosing a provider, request a full breakdown of all fees to compare the true cost of payment processing, not just the advertised rate.
Yes. This is especially important for high-risk industries such as CBD, firearms, nutraceuticals, travel, subscription services, coaching, or online businesses. A processor familiar with your industry is more likely to provide stable processing, fewer account interruptions, and solutions tailored to your business model.
If you invoice customers, accept recurring payments, or process large transactions, ACH payment processing can significantly reduce your costs. ACH transactions usually have lower fees than credit cards, so many businesses use ACH for subscriptions, memberships, B2B invoices, and high-ticket sales to improve profitability.
Chargebacks can increase processing costs, raise reserve requirements, and put your merchant account at risk. A processor with chargeback management tools, fraud prevention, and dispute support can help reduce losses and improve long-term account stability as your business grows.
Not necessarily. The lowest advertised rate does not always mean the lowest overall processing cost. Hidden fees, contract terms, funding delays, poor support, and limited payment options can make a low-cost processor more expensive over time. The best processor offers transparent pricing, reliable service, the payment methods your business needs, and flexibility for future growth.
