Quick Verdict: Best For Each Business
Skip to your situation. The right processor is mostly a function of where you sell and how big your average ticket is — not a single magic rate.
| If you mostly… | Best pick | Why |
|---|---|---|
| Sell in person (retail, market) | Square | Free POS app, solid hardware, 2.6% + $0.15 |
| Sell online or run subscriptions | Stripe | Best API, cheap ACH, global coverage |
| Run a Shopify store | Shopify Payments | Avoids the extra third-party gateway fee |
| Want maximum buyer trust | PayPal | Familiar checkout lifts conversion |
| Run a restaurant / full POS | Clover | All-in-one POS and hardware ecosystem |
| Take tiny payments (under ~$10) | PayPal Micropayments | 4.99% + $0.09 beats a fixed 30¢ |
Fee Comparison Table
US standard rates as of 2026. Higher Shopify plans and negotiated deals lower these, so always confirm on the provider's pricing page.
| Processor | In-person | Online | Monthly |
|---|---|---|---|
| Square | 2.6% + $0.15 | 2.9% + $0.30 | $0 |
| Stripe | 2.7% + $0.05 | 2.9% + $0.30 | $0 |
| PayPal | 2.29% + $0.09 | 3.49% + $0.49 | $0 |
| Clover | 2.3%-2.6% + $0.10 | 3.5% + $0.10 | $14.95+ |
| Shopify Payments | 2.6% + $0.10 | 2.9% + $0.30 | Shopify plan ($39+) |
Run your own average ticket through any of these:
The Contenders, in Brief
Square — the small-retail all-rounder
Square is what most cafes, salons, and market stalls land on, and for good reason: a genuinely free POS app, a $0 monthly fee, a famous little card reader, and next-day deposits. At 2.6% + $0.15 in person it's rarely the cheapest on paper, but the all-in-one simplicity is hard to beat for a counter business.
Stripe — the online and subscription engine
If your sales happen on a website or app, Stripe is the default. Same 2.9% + $0.30 online rate as Square, but with the best developer tooling in the business, first-class subscriptions, global card acceptance, and ACH at 0.8% capped at $5 — a killer feature for invoicing. The catch: it expects a little technical comfort.
PayPal — trust and tiny tickets
PayPal's online rate (3.49% + $0.49) is the highest here, but two things keep it on the list: the button itself converts shoppers who won't hand a card to an unfamiliar site, and its Micropayments tier (4.99% + $0.09) is the cheapest option for sub-$10 sales. Its Zettle reader is also the lowest in-person rate in this lineup.
Clover — the full-service POS
Clover is less a processor than a complete point-of-sale system, popular with restaurants and shops that want hardware, staff logins, inventory, and tipping in one box. Rates run 2.3%-2.6% + $0.10 in person, but there's a monthly plan ($14.95+), and pricing can vary by the reseller you sign with — read the agreement closely.
Shopify Payments — for Shopify stores
If you already run a Shopify store, use Shopify Payments. Online rates start at 2.9% + $0.30 on Basic and drop on higher plans — and crucially, using it avoids the extra 0.5%-2% fee Shopify charges when you process through a third-party gateway instead. That avoided surcharge often matters more than the headline rate.
What Actually Matters (Beyond the Rate)
- No monthly or junk fees. Square, Stripe, and PayPal charge nothing to keep the account open. Be wary of providers that bury statement, PCI, or gateway fees in the contract.
- Payout speed. Next-business-day deposits are now standard; same-day or instant usually costs 1%-1.5%. Don't pay for instant out of habit.
- Hardware and ecosystem. A counter business needs reliable readers, receipt printers, and a POS that staff can learn in a shift. An online business needs a clean API and a checkout that converts.
- When to graduate to interchange-plus. Flat-rate is great until it isn't. As a rough guide, interchange-plus starts winning around $4,000/month on Stripe, $7,500 on Square, and $10,000 on Clover. Past those points, the transparency pays for itself.
- Surcharging support. If you plan to pass card costs to customers, check the provider supports compliant surcharging or a cash-discount program where it's legal.
Compare effective rate, not headline rate
A processor with a low advertised rate but a monthly fee can cost more than a $0-monthly one with a slightly higher percentage. Always divide a real month's total fees by total sales to get the number that counts.
How to Make the Call
Three questions get you 90% of the way there:
- Where do most sales happen? In person leans Square or Clover; online leans Stripe or Shopify; a mix often means running two providers.
- What's your average ticket? Tiny tickets favor PayPal Micropayments; large invoices favor Stripe ACH; everything in between is a wash on rate, so decide on tooling.
- How much do you process? Under a few thousand a month, stay flat-rate for simplicity. Past the break-even points above, get an interchange-plus quote.
New to how any of these rates are built? The pillar guide explains interchange, assessments, and markup in plain English:
Frequently Asked Questions
What is the best payment processor for a small business?
There's no single best — it depends on how you sell. Square is the strongest all-rounder for in-person and small retail, Stripe is best for online and subscriptions, PayPal wins on buyer trust and tiny payments, Clover suits full-service POS, and Shopify Payments is the natural pick if you already run a Shopify store.
Which processor has the lowest fees?
In person, PayPal Zettle (2.29% + $0.09) and Square (2.6% + $0.15) lead. Online, Stripe and Square tie at 2.9% + $0.30. Above roughly $4,000-$10,000 a month, an interchange-plus processor usually beats all the flat-rate options.
Do these processors charge monthly fees?
Square, Stripe, and PayPal have no monthly fee. Clover plans start around $14.95/month, and Shopify Payments requires a Shopify plan (from about $39/month) that covers your whole store, not just payments.
When should I switch to interchange-plus pricing?
As a rough rule, interchange-plus starts beating flat-rate around $4,000/month on Stripe, $7,500/month on Square, and $10,000/month on Clover. Below those, flat-rate's simplicity wins; above them, the transparency saves money.
Is Square or Stripe better for a small business?
Square if you sell in person or want an all-in-one POS with free software and hardware. Stripe if you sell online, run subscriptions, or need cheap ACH. Their online card rates are identical at 2.9% + $0.30, so it comes down to channel and tooling, not price.
Key Takeaways
- In person / retail: Square (or Clover for a full POS).
- Online / subscriptions: Stripe (Shopify Payments if you're on Shopify).
- Buyer trust / micro-payments: PayPal.
- Square, Stripe, and PayPal have no monthly fee; Clover and Shopify do.
- Past ~$4k-$10k/month, get an interchange-plus quote — and compare effective rates, not headlines.
Pick the One That Fits How You Sell
Don't chase the lowest advertised rate — chase the one built for your channel, your ticket size, and your volume. Run your real numbers through the calculators below, factor in monthly fees and payout speed, and the right choice usually makes itself obvious.