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Electronic PaymentsBlog

July 24, 2025

Choosing a Payment Processor: A Merchant’s Guide

Choosing a Payment Processor: A Merchant’s Guide

Dealing with high fees? Poor service? Frozen funds? Your processor could be the problem. And it might be time to find a new one.

Merchants, you need to know you have a choice when it comes to your payment processor.

In this guide, we’ll show you why your processor matters and provide a checklist for vetting your options.

Why Your Processor Matters

Most customers don’t pay with cash, so you need to accept credit and debit payments. But just a card swiper or point of sale system alone isn’t enough; to actually move money from customer to bank, you also need a payment processor—the service behind the scenes that authorizes, routes, and settles each transaction.

If you’re not clear on why your processor matters, you’re not alone; many merchants don’t have a clear picture of the backstage world of payment processing. You might have never had a reason to consider your processor before now, especially if you launched your business with a POS that bundled processing  with everything else.

There’s nothing wrong with that, but it has one important consequence: if you don’t know you rely on a processor, you also don’t know that you have a choice of processors—and not all processors are equal.

Are You Ready to Explore New Processors?

If you’re considering a new processor, you’re likely in one of these scenarios:

  • You’re launching a new business
  • You’re unhappy with your current processing
  • You’re changing POS systems
  • You’re upgrading your business model

All of these are great reasons to research and explore your options. Below, we’ll explore considerations specific to each.

If You’re Launching a New Business…

When you’re just starting out, it’s easy to go with the first solution that helps you take payments, but this is also when you’re most flexible. Choosing the right processor from the beginning will give you a headstart on cash flow, support, and growth—and save you from headaches later on.

What to Prioritize in Your Search

When evaluating processors, pay special attention to how well they support first-time business owners (or experienced business owners starting fresh with a new team and vertical). Look for partners that offer:

  • Onboarding help
  • Education about merchant statements and fees
  • A clear roadmap for scaling as your needs evolve

If You Have Problems with Your Current Processor…

This is one of the most common triggers for considering a new processor; you often don’t look for alternatives until a problem becomes too hard to ignore.

Here are a few of the most typical concerns that initiate a new processor search:

  • Fees suddenly increase
  • Lack of support during a technical issue
  • Frozen funds or chargeback frustration
  • Poor reporting or visibility into payments

If you’re experiencing high fees, unresponsive support, or frozen funds, these issues shouldn’t be dismissed as the cost of doing business; they’re signs that you might be able to find a more supportive processor.

What to Prioritize in Your Search

You’ll want to vet your new options according to the issue that’s currently giving you the most trouble, but don’t forget to take the whole picture into account; you don’t want to fix your fee structure only to suffer from bad service with your new provider!

If You’re Changing POS Systems…

Switching your point of sale system is one of the best opportunities to evaluate your entire payments setup. While some POS platforms bundle processing by default, many allow you to bring your own processor—which gives you more control over costs, service, and flexibility.

What to Prioritize in Your Search

Pay particular attention to integration concerns, including:

  • Compatibility with a wide range of POS platforms (or your particular POS of choice)
  • Consistent pricing, even with third-party systems
  • Support for hybrid setups (in-store, mobile, and online)
  • Responsive service when tech or integration questions arise

(And if you haven’t picked out your POS yet, check out our guide on choosing between different types of POS systems.)

If You’re Upgrading Your Business Model…

As your business grows, your payment needs might become more complex. Whether you’re adding ecommerce to a brick-and-mortar store, launching a subscription offering, or expanding into mobile service, you need a processor who can support your new trajectory. What worked for you when your business was simpler may no longer be enough to keep up.

What to Prioritize in Your Search

When evolving your business model, make note of what your current processor lacks that you need going forward. Seek out new processors that can support this and continue the same level of service you’re used to.

Here are some examples of what to prioritize based on your particular business transition:

  • From in-person to online: Omnichannel and ecommerce support
  • From single-location to mobile or multi-site: Scalable infrastructure and centralized reporting
  • From one-time purchases to subscriptions or invoices: Recurring billing and customizable payment options
  • From basic payments to more complex operations: Robust reporting, role-based access, and integrations with your business tools

Get Started: Consult Multiple Sources to Round Up Your Options

Before you can evaluate your options, you need to round up your candidates. Here are a few sources merchants often use to create a comprehensive bullpen.

Payment Agents and ISOs

While it’s not always the case, most merchants get their POS and processing through a local payments agent or independent sales organization (ISO). Agents are the frontline of the payments industry and can offer invaluable recommendations, so if someone approaches you about switching processors, it’s well worth your time to hear what they have to say. Then, note down the processors they recommend and do your own research.

Business Tool Providers & Integrations

If you’re looking at a particular POS system or are still searching the market, you should also evaluate the processors associated with each system. Big-name POS systems like Square, Toast, and Shopify typically include processing bundled with POS. Similarly, your accounting application (e.g., QuickBooks) might have a default processor integrated with their software.

While it might seem most convenient to use the default option offered to you, you do have a choice; many third-party processors can integrate with a wide range of POS systems and softwares, so make sure you carefully compare all your options to see who will provide the best service.

Online Search

After you’ve listed processors recommended to you and processors paired with your business tools, you can round out your list with an online search for payment processor options, even specifying your research to what’s important to you—for example, finding processors who can support small businesses, ecommerce, or your particular vertical. List the names you find to round out your list of options with alternatives that might not have surfaced previously.

Evaluate Your Options: What to Consider for Each Processor

After you’ve rounded up a shortlist of processors, it’s time to evaluate which one best fits your business. Whether you’re just starting out, switching systems, or trying to fix a frustrating experience, these are the factors that matter most in your search.

Accepted Payment Types

Make sure your processor supports all the ways your customers want to pay—and don’t forget to account for the future, too. Choose someone who supports your current needs and is set up to support emerging payment methods (even if you haven’t seen customers who request these yet).

Critical payment options include:

  • All major debit and credit cards (for both EMV chip and magnetic stripe)
  • Contactless and NFC payments (tap-to-pay, Apple Pay®, Google Pay™)
  • ACH and bank transfers
  • Gift cards and loyalty programs
  • QR codes
  • EBT transactions

Pricing & Fee Transparency

One of the most common complaints merchants have is confusing or unpredictable pricing. A good processor should be upfront about all costs, including:

  • Interchange and transaction fees
  • Monthly or annual service fees
  • Equipment costs
  • Any compliance or PCI-related charges

Watch out for:

  • Teaser rates that jump after a few months
  • Vague or padded statements
  • Hidden fees

Contract Terms & Flexibility

Before signing anything, be sure you fully understand the contract terms. Pay close attention to:

  • Contract length and renewal policies
  • Equipment ownership vs. leasing
  • Cancellation or termination fees

Red flags to avoid:

  • “Free” equipment that turns into a costly lease*
  • Auto-renewing contracts with hard-to-exit clauses
  • Being locked into systems that don’t scale with your business

*Not all free offers are red flags, so make sure you’re checking the fine print rather than dismissing a great offer out of hand!

Security & Compliance

Security is non-negotiable. Your processor should help you stay compliant with industry standards—not make it harder. Look for:

  • PCI DSS compliance tools and support
  • Tokenization and encryption for secure transactions
  • Clear guidance to reduce risk and meet regulatory standards

Speed of Funding

Delays in deposits can disrupt your operations. Look for processors that offer:

  • Fast, predictable funding timelines
  • Clear cutoff times for same-day or next-day deposits
  • Reliable access to funds—even during high-volume sales

Customer Support

You deserve responsive support when you need it. Don’t wait until an emergency to find out if your provider is reliable. Ask:

  • Is support available 24/7, including weekends and holidays?
  • Will I speak to a trained, U.S.-based rep?
  • How quickly are issues typically resolved?

Integration with Tools & Platforms

Your processor should work seamlessly with the rest of your tech stack. Check for compatibility with:

  • Your current or planned POS system
  • Ecommerce platforms and online shopping carts
  • Accounting software (e.g., QuickBooks®)
  • Inventory and CRM tools

Scalability & Industry Fit

Your processor should grow with you—and support the unique needs of your industry. Look for:

  • Options for multi-location or mobile operations
  • Experience with businesses like yours (retail, restaurants, salons, eCommerce, etc.)
  • Flexibility to support unique or regulated industries

Dual Pricing & Compliance Tools

Dual pricing can help offset your processing costs—but only if it’s implemented correctly. Your processor should provide:

  • Customer-facing displays and signage
  • Printed receipts showing cash vs. list price
  • Built-in compliance features that meet regulatory standards

Chargeback Support & Dispute Resolution

Chargebacks are stressful—but a good processor helps you fight back. Prioritize processors that offer:

  • Real-time alerts and monitoring
  • Assistance with documentation
  • Education on how to prevent disputes

Merchant Ownership & Control

One of the most common surprises merchants face—especially with large aggregators (e.g., Square, PayPal)—is having their funds delayed or withheld after a big sale or unusual transaction. Aggregators operate under a shared merchant account model and often skip individual underwriting. That means risk reviews happen after a transaction—not before. In contrast, direct processors assign each merchant a unique merchant ID (MID) and evaluate risk upfront, making funding more stable and predictable.

During your evaluation, ask:

  • Will I have a dedicated merchant ID (MID)?
  • Can I access all transaction data?
  • Will I retain control of my account if I change platforms?

Onboarding & Ease of Setup

Getting started shouldn’t be complicated. Choose a processor that makes setup smooth and stress-free. Look for:

  • A clear, guided application process
  • Fast approval and setup timelines
  • Dedicated onboarding support—not just a welcome email

Ready to Choose the Right Processor?

Whether you’re launching your first business, expanding your offerings, or trying to solve ongoing frustrations, the right payment processor can support your operations, simplify your day-to-day, and grow with you.

Start by identifying your needs, reviewing your current experience, and researching options that align with your goals. Take your time to compare features, pricing, and real customer support. And remember: you’re not locked into a single provider forever. The more you know about how payment processing works, the more empowered you’ll be to choose a partner who puts your business first.

If you’re looking for a transparent, full-service processor that offers 24/7 support, fast funding, and tools to help you grow, we hope you’ll add Electronic Payments to your list of processors to consider.

Explore our merchant services →

Frequently Asked Questions About Choosing a Payment Processor

How do I know if I need a new processor?

If you’re dealing with high fees, poor customer service, or technology limitations—or if your business has outgrown your current setup—it may be time to explore better options. Ask yourself if your current provider still meets your needs.

What’s the difference between a payment processor and a POS provider?

Your POS is the physical or digital tool you use to take payments (like a card reader or register). Your processor is the behind-the-scenes service that moves money from your customer’s account to yours. Sometimes they’re bundled, but you often have the option to choose your own processor.

Are all payment processors basically the same?

Not at all. They vary in pricing transparency, service quality, funding speed, technology compatibility, contract terms, and more. A processor that fits one business might be a bad match for another—so it pays to compare.

What should I prioritize if I’m just starting out?

New businesses should prioritize easy onboarding, flexible scaling options, and support from providers who can walk you through statements, fee structures, and future-proof tools.

Can I keep my same hardware if I choose a different processor?

Often, yes. But not always. Some equipment is proprietary or locked to a specific provider. Ask your new processor about compatibility—or whether they offer upgrades or replacements.

Why does pricing vary so much between processors?

Pricing depends on factors like your industry, transaction volume, risk profile, and whether the provider is a direct processor or aggregator. Make sure you get a full breakdown of fees—and know what’s included.

How do I evaluate a processor’s customer support?

Don’t just take their word for it. Look for 24/7 access, U.S.-based support, reviews from other merchants, and fast resolution times. If possible, test their support experience before signing on.

What questions should I ask a potential processor?

Key questions include:

  • How soon will I get funded after closing a batch?
  • Do I get a dedicated merchant ID?
  • What happens if I stop using your service?
  • What kinds of businesses or transactions do you specialize in?
  • What’s your policy on chargebacks?