Search payment processing companies and the list gets confusing fast, partly because the businesses that show up are not all the same type of company, even though they all end up processing a credit card.
Most of these companies are also just called a payment processor, and the two terms get used for the same thing in everyday conversation. Technically a payment processor is the piece that authorizes the transaction, while a payment processing company is the business selling and supporting that service, but almost nobody outside the industry draws that line.
The different types of payment processing companies
- Direct processors and acquiring banks. The companies that actually move money through the card networks. Most businesses never deal with these directly.
- Independent sales organizations, often shortened to ISOs. Companies that resell and support processing on behalf of a processor or bank, usually offering more personal service and negotiable pricing.
- Payment facilitators. Companies that let a business sign up instantly with flat, published pricing and no underwriting delay, in exchange for less flexibility and less room to negotiate.
- Point of sale companies with processing built in. POS software providers, especially in restaurants and retail, that bundle their own processing into the system rather than letting a business choose its own processor.
How to compare payment processing companies
The published rate on a website rarely tells the full story. A fair comparison means asking the same questions of every company: what is the actual effective rate once monthly fees are included, is the pricing model interchange plus a fixed markup or a flat blended rate, what is the contract length, and is there a surcharge or cash discount option that removes the card fee from the business side of the transaction entirely.
Questions worth asking before switching
Before moving away from a current provider, it is worth getting a real comparison built on actual sales history rather than an average rate. A processing statement from the last few months tells a more accurate story than any rate sheet.
If you want that comparison done using your own numbers, send us your last statement and we will show you exactly where the difference is.