How to Choose the Right Payment Processor for Your Small Business

Choosing a payment processor is a bit like picking out shoes: the best fit depends on where you’re headed, how far you’re planning to go, and what makes you comfortable. Not every processor is created equal, and that’s a good thing! Whether you run a cozy coffee shop, a bustling online boutique, or a freelance consultancy, your payment solution should make your life easier, not harder. In this guide, we’ll walk through the essential questions to ask yourself so you can confidently pick the perfect processor for your business.

1. Understand How You Plan to Sell

Before you even glance at fees or features, clarify exactly where and how you’ll accept payments:

• Online only: You need a checkout page, invoicing tool, or payment link.
• In-person only: You’ll need a reliable card reader and point-of-sale (POS) software.
• Hybrid: A system that combines both seamlessly (like Square or Shopify).
• International: You’ll need multi-currency and cross-border support.

Your sales channels will narrow down your choices quickly.

Start
│
├── Do you sell online only?
│ ├── Yes
│ │ ├── Do you want an all-in-one store builder?
│ │ │ ├── Yes → Use Shopify Payments
│ │ │ └── No
│ │ │ ├── Do you want no monthly fees?
│ │ │ │ ├── Yes → Use Stripe or PayPal
│ │ │ │ └── No → Use Authorize.net
│ │ └── No → Use Authorize.net
│
├── Do you sell both online and in person?
│ ├── Yes
│ │ ├── Do you want to manage everything from one system?
│ │ │ ├── Yes → Use Square
│ │ │ └── No → Combine Stripe + POS
│
└── Do you mostly invoice or send payment links?
├── Yes
│ ├── Want a simple, user-friendly tool?
│ │ ├── Yes → Use Square or PayPal
│ │ └── No → Use Stripe or Authorize.net
└── No → Go back and reassess needs

2. Consider Your Tech Comfort Level

Your technical skills will guide your choice:

• Are you a developer (or have access to one)? Stripe or Braintree can give you powerful tools.
• Prefer no-code solutions? Platforms like Square or PayPal make it easy to start without technical knowledge.
• Need a full storefront? Shopify offers a website + payments in one.

Match your platform choice to the complexity you’re comfortable handling—or avoiding.

3. Think About Your Business Volume

Your sales volume significantly impacts cost-effectiveness:

• Low volume: Avoid platforms with monthly fees. Go with Stripe, Square, or PayPal.
• Medium to high volume: You might save money with a custom merchant account via Authorize.net or Braintree.
• Subscription billing: Make sure recurring payments are supported (Stripe, Authorize.net, PayPal).

Carefully evaluate fees and contract terms, especially as your business grows.

4. Match Your Customer Expectations

Some customers expect specific payment options:

• Venmo: Very popular with younger users (available via PayPal/Braintree).
• Apple Pay / Google Pay: Essential for mobile checkout.
• PayPal Wallet: Familiar and trusted.
• Buy Now, Pay Later: Becoming common for higher-ticket purchases.

Choose a processor that aligns with your customers’ preferred payment options.

5. Evaluate Customer Support and Stability

When money is involved, support matters. Ask:

• Can I reach someone by phone, or is it only chat/email?
• Are there account holds or payout delays?
• Does the provider have a history of sudden freezes?

Look at independent reviews and trust indicators.

6. Compare the Real Costs

Don’t just look at the transaction percentage. Consider:

• Set up or monthly fees
• Per-transaction flat fees
• Instant payout fees
• Chargeback fees
• Multi-currency or cross-border fees

Sometimes a “higher” transaction rate is cheaper in the long run.

Final Thoughts: Start with Your Needs, Not Their Features

It’s easy to get distracted by flashy marketing and extensive feature lists. Ultimately, what matters is how well a processor fits your daily operations and supports your cash flow. Start small if needed, but always ensure your chosen platform can scale alongside your business.

Still not sure where to start? Check out our comparison of the Top 5 Online Payment Providers in the U.S. to see how major platforms stack up.