Online Payment ProcessingWhich Processing Pricing Model Works Best for You?

February 7, 2024 | 21 min read

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Online Payment Processing

In a Nutshell

On the surface, online payment processing seems like a straightforward system; someone clicks “buy now,” and money appears in your account. But is it really that simple? What if there’s a problem, and funds don’t appear? How should you respond? Let’s take a closer look at online payment processing to learn how it works, why you need it, and what to look for in your next payment processor.

Online Payment Processing: How Does This Really Work for eCommerce Merchants?

In 2023, global cardholders spent a whopping $9.46 trillion shopping online. Plus, this number is only going to get bigger as time passes. That means the way in which businesses handle payments needs to evolve, too.

Online payment processing might not seem like the most interesting or exciting part of running an online shop. However, the way in which you process payments is super important. Picking the wrong service to manage your payments can mean seeing thousands of dollars go to waste each month

To that end, we're going to explore how online payment processing works, covering everything from the costs involved to the potential problems you might face. Plus, we'll share a list of the most reliable services for handling online payments.

How Online Payment Processing Works

Online payment processing refers to the method businesses use to collect payments electronically through debit or credit card transactions. It involves the process that takes place when customers make purchases online or via their mobile devices using their credit cards.

Before we dive into the details, let's quickly go over the parties involved. Besides the cardholder and merchant, other key players include:

Card Network

1. Card Network:
Company that maintains interbank payment infrastructure.

Acquiring Bank

2. Acquiring Bank:
The bank where you have your merchant account

Issuing bank

3. Issuing bank:
The bank that issued the credit card used for the purchase.

Payment Processor

4. Payment Processor:
A company that receives payments on your behalf.

Payment Gateway

5. Payment Gateway:
A technology provider that connects you to the processor.

The entire payment process starts with the cardholder. Shoppers visit your website, pick their items, and go to checkout. There, they fill out a form with transaction details and personal information, like their name, shipping information, and credit card details.

Once the form is filled out and submitted, the transaction process begins.

Online Payment Processing


Before the order is accepted, the bank makes sure the card has not been reported as stolen, and that there are enough funds or credit available.

Online Payment Processing


The merchant sends a group of transactions for processing, usually at the end of the day. The acquiring bank forwards this batch to the card network.

Online Payment Processing


The card network passes the transaction details to the cardholder's bank, which charges or deducts the cardholder's account. The funds are sent back to the acquirer.

Online Payment Processing


The acquiring bank deposits the money into your merchant account (minus any fees applicable). Now, the money is available for you to use.

Real-time credit card processing services are also available. These services combine some of these steps to complete a transaction instantly when a sale is made. While it has some benefits, it can increase processing costs and make it challenging to adjust the sales amount later. This is problematic for industries in which tipping is involved, or for which a final total is not known at the time of checkout.

Online Payment Processing: Fee Structures

Like any service provider, you need to pay for online payment processing. It's smart to know all about the credit card processing fees you'll be paying before you decide to sign up.

There are different ways these services can charge you. The main fee structures are tiered, flat-rate, and markup pricing. Each of these methods has its own pros and cons, so think about what makes the most sense for your business before you choose.

Online Payment Processing

Tiered Pricing

This method charges you based on what kind of sale you're making. You pay lower fees if the buyer uses a debit card or a credit card without rewards, and swipes or inserts the card. But, if you're selling things online or through a phone, you'll pay more. These sales are seen as riskier, so the fee is higher. This might not be great for businesses that mostly sell online.
Online Payment Processing

Markup Pricing

Here, you pay a flat fee per transaction, plus a little extra on top of that. This fee typically varies anywhere from 0.25% to 2.75% per transaction. Sometimes, you can negotiate with your processor to get a better rate. But, since the bank fee can change based on the sale, it's hard to guess how much you'll need to budget for.
Online Payment Processing

Flat-Rate Pricing

Flat-rate pricing is a good option if you want to know exactly what you'll be paying every month. You pay a set fee every month, plus a fixed fee for each sale. This way, you can easily figure out your monthly costs.

Internet Credit Card Processing: Other Fees

Looking at ads from companies that handle payment processing, you'll see a lot of talk about their low rates. That's fine... but, when you're choosing a service, it's smart to remember that the rate they show in the ad might not be the full story.

There are lots of other fees that could add to what you pay in the end. These can include:

  • Application Fees
  • Setup Fees
  • Gateway Integration Fees
  • Per-Transaction Gateway Fees
  • Transaction or Batch Fees
  • Software Fees
  • Statement Fees
  • Reporting Fees
  • PCI Compliance/Certification Fees
  • Ongoing or expanded Customer Support Fees
  • Refund Fees
  • Address Verification Fees
  • Monthly Minimums or Recurring Payments Fees
  • Cancellation Fees
  • Merchant Account fees

Some fees are one-time costs. Others might be recurring monthly costs, or they might be charged for each transaction.

Not every provider will assess all these fees; some might include everything in their advertised rate. The key for business owners is to ask about all the possible fees to get the full picture of what you'll be paying before you pick a service.


Use the above list when doing research about different online payment processing providers. The projected fees you’ll pay for service may vary when accounting for these additional services and fees.

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Questions to Ask When Choosing a Provider

Picking the right service to handle your payments involves a lot more than just looking at the total cost. It's also about making sure they offer clear pricing and considering other key points before making a choice. 

Here are some important questions to ask:

Nothing turns off a customer faster than not being able to use their preferred payment method at checkout. Ensure the service you choose accepts all major credit cards, as many minor ones as possible, and additional options like gift cards. If you're thinking about accepting payments through digital wallets, check that they're supported, too.

The timing for receiving money from credit card sales depends on the payment service and your bank. Although it might show up in your account, it's not really yours until the sale is settled. Most services transfer funds within 24-48 hours, so be cautious of anyone taking much longer or shorter than that.

Check if the service will be there for you when needed. Low fees aren't helpful if there's a problem and you can't get in touch with support. Find out their hours, communication methods, and how quickly they respond. Round-the-clock access is ideal, and some services offer dedicated support agents.

Some services limit the number of transactions you can have each month, especially for new accounts. Ask about these limits and how they might change as your business grows. Also, check if there are fees for not hitting minimum transaction counts.

Long contracts aren't always a good fit. Ask about whether prospective service providers offer yearly, biannual, or month-to-month agreements. Understand what happens if you need to cancel, including any fees.

You need to use a service that meets PCI standards to keep card information safe. Make sure their system and practices are up to scratch, and that you can maintain compliance with all regulatory requirements.

Your payment system needs to integrate smoothly with your online store and accounting software to avoid checkout delays and keep your finances in order. Check how well they can integrate with your setup.

Clear reporting helps you understand what you're getting for your money. Ask for report samples to see if they're easy to understand and meet your needs. Also, see whether reporting can be customized, and whether the key performance indicators provided are relevant to your business.


Another key question to ask: What's your approach to fraud and chargebacks? Managing fraud is a big deal when processing credit card payments. Good payment services offer tools to spot fraud and help manage chargebacks. It's a bonus if they can work with specialized services like Chargebacks911® to give you even better protection.

Asking these questions will help you find a payment processing service that's a good fit for your business, covering everything from payment options to security and customer support.

The Top 10 Payment Processors for 2024

We took a detailed look at today's highest-rated payment processing companies and developed a comprehensive rundown of the leading service providers.

Ratings and reviews were averaged based on sources featured by Forbes, Nerdwallet, and TechRadar. The pros and cons listed are paraphrased directly from real, firsthand customer reviews on

Online Payment Processing

#1 | PayJunction

“Best Payment Processor for Balanced Service”

PayJunction provides small and medium-sized businesses with solutions that make it easy to accept credit and debit card payments in-store, online, and on the go. They deliver secure, innovative services, including a contactless payment system for in-person transactions, plsu eco-friendly remote payment features like digital invoicing, signatures, and receipts.

PayJunction’s cloud-powered payment solution easily and securely integrates with industry-leading business software and management platforms. This is done via RESTful APIs for businesses seeking an integrated payments solution. Companies looking for a stand-alone, out-of-the-box solution should look no further.



  • Outstanding, personable customer support
  • Clean and concise reporting
  • Accurate and easy-to-use online portal and POS terminals


  • In some cases, processing fees are deducted daily instead of monthly
  • For a multi-location business, transaction limits cannot be extended or applied to sister locations
  • Limited mobile processing options

Pricing: Two-tier, volume-based pricing

Transaction Fees: Interchange + 0.75% per transaction. Additional fee of $0.07 for swiped credit card transaction, which may vary depending on card/transaction type.

Extra Perks:

  • Month-to-month service
  • Securely store and recharge cards on file
  • Streamlined electronic invoice payments
  • Automated sales reports
  • Hosted checkout

Online Payment Processing

#2 | Payline

“Best Payment Processor for Brick-and-Mortar”

Payline is a Pineapple Payments company headquartered in Chicago, Illinois. They provide solutions to businesses ranging from startups to Fortune 500 companies, focusing on the payment experience.

Payline offers gateway payment processing, and its web solutions are designed to integrate with over 175 online shopping carts. The company also offers mobile solutions designed to accept payments via mobile apps. The Payline payment processing gateway also integrates with QuickBooks for ease of payroll management and business financials in general.

Pricing for brick-and-mortar stores includes a monthly fee, plus a small percentage fee per transaction. For online stores, the monthly and transaction fees are a little higher.



  • Easy to use and set up
  • No early termination fees
  • Excellent customer service and clarity are guaranteed


  • Occasional program glitches noted by customers
  • Transaction costs are not fully transparent
  • Not available outside the US

Pricing: Call for a free quote

Transaction Fees: In-person transactions are 0.2% + $0.20 per transaction, and a fee of $20 per month. CNP transactions are 0.4% + $0.20 per transaction, plus the $20 monthly fee.

Extra Perks:

  • Built-in security and fraud protection
  • Mobile app integration
  • Lower monthly fee

Online Payment Processing

#3 | Stripe

“Best Payment Processor for Payments Technology”

According to Forbes, Stripe outshines its competitors in terms of online payments because it accepts all types of mobile wallets. They take Apple Pay and Google Pay, plus popular international wallets like Alipay and WeChat Pay. Stripe also lets merchants accept payments or recurring charges with ACH debit, ACH credit or wire transfers for an 0.8% fee (capped at $5).

Stripe is designed for larger firms, and offers a plethora of APIs that allow merchants to create their own subscription services, on-demand marketplaces, or crowdfunding platforms. It supports a range of development languages, including Ruby, Python, PHP and Java.

The company also offers credit card readers that integrate with popular eCommerce and accounting software, including Shopify, WooCommerce and Xero. Payouts are typically available within two days but you can also choose instant payouts for an additional 1% ($0.50 minimum). Stripe also offers 24/7 email, chat, and phone support.



  • Faster, frictionless payments
  • Seamless to set up and use, and comes with a variety of integration options
  • One of the best tools for collecting payments from different countries/currencies


  • Requires fundamental tech savvy to operate (large learning curve)
  • Stripe has slightly higher fees than Square, and takes a day longer to deposit funds
  • Spotty customer service where troubleshooting is involved

Pricing: Flat rate pricing, with $0 monthly fees

Transaction Fees: 2.7% + $0.05 per transaction for card-present payments. 2.9% + $0.30 per transaction for online or manually keyed-in payments.

Extra Perks:

  • Global processing
  • Omnichannel
  • Instant payouts available
  • Transparent pricing structure
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Online Payment Processing

#4 | Square

“Best Payment Processor for Small Businesses & Startups”

Square is a highly integratable payment platform that was established to empower small businesses and startups the ability to take physical and online credit card payments. The company has added a multiplicity of channels, integrations, and portals over time to empower and enable every type of business.

Square offers a complete suite of business tools for eCommerce and brick-and-mortar businesses, with an intuitive dashboard that centralizes all income streams and data sources with advanced analytics. Hardware and software options work seamlessly to provide stress-free, modern business solutions.

Square also offers register and payment hardware for retailers, restaurants and more, as well as loyalty, appointment scheduling, and inventory software.



  • Accepts multiple forms of payment that arrive in your bank account within one business day
  • Pays out next business day
  • Easy to setup and use


  • Pricing model makes it less cost-effective for bigger companies
  • Deposit limits and add-on services are pricey
  • Hardware can sometimes be buggy

Pricing: Flat rate pricing, with $0 monthly fees

Transaction Fees: Card-present payments are 2.6% + $0.10 per transaction. Card-not-present payments are 2.9% + $0.30 per transaction. Keyed-in payments are 3.5% + $0.15 per transaction.

Extra Perks:

Online Payment Processing

#5 | ACI Worldwide

“Best Payment Processor for Online Payments”

ACI Worldwide delivers white label global payment gateway solutions to payment service providers (PSPs), independent sales organizations (ISOs), acquirers, independent software vendors (ISVs), and value-added resellers (VARs). They allow merchants to fully outsource payment transaction processing and integrate a gateway-to-gateway solution.

It’s a smart, agile payments orchestration platform for international growth. ACI Worldwide enables customer journeys, accepts all payments, prevents fraud and optimizes payments configuration for maximum conversion with minimum cost.



  • Best encrypted payment portal, with real-time alerts
  • Superior analytics and conversion data
  • Designed specifically with eCommerce in mind


  • Pricing and fees lack transparency
  • Limited personalization with integration
  • Payments are not frictionless; advanced security measures increase false negatives

Pricing: Call for a free quote

Transaction Fees: No data; call for clarification

Extra Perks:

  • Omnichannel solutions
  • Wide range of products to choose from

Online Payment Processing

#6 | Authorize.Net

“Best Payment Processor for Flexible Payments”

According to G2, Authorize.Net (from Visa) supports all major credit cards, including Visa, Mastercard, American Express, Discover, Diner’s Club, and JCB. The platform is compatible with digital payment services such as Apple Pay, PayPal, and Visa Checkout.

The software can accept transactions made by customers all over the world. However, your business must be registered in the US, UK, Canada, Europe, or Australia if you’d like to use this service.

Plans start with the gateway-only offering, which has no setup fee; only a monthly gateway fee, plus a per-transaction fee and a daily batch fee. At the other end of the spectrum are enterprise solutions that offer comprehensive, tailored pricing for larger business needs.



  • Simple, easy-to-navigate interface
  • Robust security protocols that help against fraud and chargebacks
  • Merchant payouts are processed and finalized in just a few days


  • False positives and negatives are common
  • The Authnet Dashboard has not changed in over a decade, and could use a modern facelift
  • The platform is pricey

Pricing: $25 monthly gateway fee. Setup is $49.

Transaction Fees: All-in-one option with a per-transaction rate of 2.9% + $0.30, with no setup fee.

Extra Perks:

  • Global merchant account provider
  • Support for credit cards and digital providers
  • Wide range of currencies supported
  • Designed for any business

Online Payment Processing

#7 | Payment Depot

“Best Payment Processor for High-Volume Sales”

Unlike other payment processor companies, which take a percentage of each transaction, Payment Depot uses a subscription pricing model based on a merchant’s monthly transaction volume. Merchants pay a flat fee per transaction, plus the interchange rate, regardless of the transaction type.

Payment Depot doesn’t charge any cancellation or hidden fees. At the same time, they provide access to funds within 24 to 48 hours of a transaction. The company also offers a variety of terminals, credit card readers, and POS systems with customer support available 24 hours a day.

Payment Depot works best with high-volume merchants or merchants who frequently process high-dollar products and services.



  • Saves merchants a ton of money in fees
  • Customer care and support are top-notch
  • Month-to-month billing


  • Hardware options are limited
  • Pricey for businesses with lower volumes
  • High-risk businesses may be denied

Pricing: A flat $79 to $99 per month (Enterprise membership starts at $199) with a monthly transaction limit of $25,000 to over $300,000 depending on the plan.

Transaction Fees: Fixed $0.07 to $0.15 per transaction, plus the interchange rate.

Extra Perks:

  • Low transaction fees
  • 24/7 customer support

Online Payment Processing

#8 | Veem

“Best Payment Processor for International Payments”

Veem is a payment processor that “uncomplicates the end-to-end AP/AR process.” They offer seamless integrations to leading accounting software, real-time tracking on payments and cost-effective, and flexible payment options. Now businesses have the power to pay how they prefer and eliminate friction with customers to get paid faster.

Veem provides broad access to online global payment tools to send and receive payments in 100 countries and in over 70 currencies, all on one payment network. The company enables businesses to track international payments from start to finish, providing live updates on transactions at any time.



  • Transactions are easy and traceable
  • All-in-one dashboard
  • Low cost for international payments


  • Transactions can take 4-6 business days to process
  • Not all countries are represented
  • Setup and onboarding is dodgy

Pricing: Two-tier pricing scale—international and domestic (international wire transfers start at $29 per transaction)

Transaction Fees: Transaction Fees: 2.9% per transaction; 1% of total amount.

Extra Perks:

  • Mass pay options for contractors and partners

Online Payment Processing

#9 | BlueSnap

“Best Payment Processor for Vendor Partnerships & Split Payments”

BlueSnap supports payments through multiple sales channels such as online and mobile sales, marketplaces, subscriptions, invoice payments and manual orders through a virtual terminal. For businesses looking for embedded payments, the company offers white-labeled payments for platforms with automated underwriting and onboarding. This supports marketplaces and split payments.

With one integration and contract, businesses can sell in over 200 geographies with access to local acquiring in 47 countries, 110+ currencies and 100+ global payment types. These include popular eWallets and automated accounts receivable, all backed by world-class fraud protection and chargeback management, built-in solutions for regulation and tax compliance, and unified global reporting to help businesses grow.



  • New features continuously available
  • Bluesnap is very accommodating for unique needs and works with merchants to modify workflows to fit the business requirements
  • Integration with hosted fields is fairly simple and seamless


  • Technical support needs work
  • Good reference docs, but no helpful implementation guides, recommendations for choice among the various technical solutions, etc
  • Patchwork system; not all facets of operations are on the same platform

Pricing: Pay-as-you-go pricing, with $0 startup, monthly, or cancellation fees

Transaction Fees: 2.9% + $0.30 per successful card transaction

Extra Perks:

  • Global processing with one account
  • Interchange plus, tiered or flat-rate pricing
  • Level 2 and Level 3 data processing rates
  • Charity or nonprofit payment processing rates
  • Accounts receivable automation

Online Payment Processing

#10 | GoCardless

“Best Payment Processor for Recurring Billing”

GoCardless is the global leader in recurring payments. They’re also the world's largest bank-to-bank direct debit platform, helping businesses accept payments in over 30 of the world’s largest economies. GoCardless takes the pain out of getting paid for more than 55,000 businesses worldwide, from enterprise to small businesses. Their clients range from small businesses to household names such as DocuSign, TripAdvisor, and The Guardian.

The company’s focus is on collecting payments through direct debit. This is done by seamlessly working with customers' existing billing software or payment gateway. The platform integrates with 200+ partners such as Zuora, Salesforce Billing, Recurly, and Yaypay.



  • Online dashboard interface is clean and user-friendly
  • Minimal fees
  • Excellent processes for automated payments


  • Any per-transaction price increases are substantial
  • Can be difficult to speak to a real person when tech support is required
  • Slight delay in payouts

Pricing: Two tier per-transaction pricing; custom pricing available.

Transaction Fees: 1% + $0.25 for domestic transactions, with a maximum of $2.50 per transaction.An additional fee of 0.3% applies to transaction values above $1,000. Failure and chargeback fees apply. For international transactions, the fee increases to 2% + $0.25 per transaction; currency conversion is included, with exchange rate powered by Wise.

Extra Perks:

  • Personalized billing
  • Accounting integration
  • Usage tracking

Need Help Making It All Work?

Credit card processing is a complex part of doing business online. Add in the stress and restrictions associated with internet processing, and it can quickly become overwhelming. Then there’s added dangers of fraud and dealing with chargebacks. It’s a lot to handle.

Fortunately, you don’t have to do it all alone. Our end-to-end dispute service platform works with any provider or gateway. We can help you prevent more chargebacks, deflect more fraud, and maximize your ROI. For more information, contact Chargebacks911® today.


What is the online payment processing?

Online payment processing enables businesses to accept payments electronically from customers using debit or credit cards. It's the system that handles transactions when customers buy items online or through their mobile devices.

How do I process a payment online?

Businesses use a payment gateway to process payments online and securely transmit the customer's card information from the website to the payment network for authorization and settlement. Once approved, the transaction is completed, and the funds are transferred to the business's account.

What are the best online payment processors?

The best online payment processors offer secure, reliable transaction handling with competitive fees, and they support a wide range of payment methods to cater to diverse customer preferences. They also provide seamless integration with business websites and offer excellent customer service and fraud protection features.

What are the basics of payment processing?

Online payment processing allows businesses to securely accept payments from customers via credit and debit cards through the internet. It involves encrypting transaction details, ensuring secure data transfer, and facilitating the approval and settlement of payments.

How long should an online payment take to process?

Online payment processing typically completes within a few seconds for authorization, but the actual transfer of funds to a merchant's account can take 1-3 business days, depending on the payment processor and banking institutions involved.

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