The Best Free Credit Card Processors (Our Recommendations)

Whether you’ve been in business for years, or you’re just getting started, keeping your costs as low as possible is a priority.

It is possible to find free credit card processing services, you just need to know where to look.

So let’s get right into it!

Here are our recommendations, as well as what you keep an eye out for before you sign on the dotted line.

Our Picks for the Top Free Payment Processors

High-risk merchants
No setup fee.
No monthly fee.
Every business has a dedicated account manager to serve them.
Merchants have access to around the clock seven day a week support.
Account setup within twenty-four hours.



Best for

High-Risk Merchants

Specializes in

High Risk

Pricing Summary

Setup Fee: None

Monthly Fee: None

Swipe Rate: Unknown

Keyed-in Rate: Unknown

Early Termination Fee: Unknown

Contract Terms:

Dharma Merchant Services
Non-profit, restaurant, and retail merchants
No early termination fee.
Month to month contract.
No annual fee.
Interchange plus pricing offered.
Discounted pricing for qualified non profit companies.



Best for

Dharma's website caters its services to small-sized businesses with up to twenty employees, in verticals such as restaurants, non-profits, and e-commerce platforms.

Specializes in

Dharma Merchant Services provides mobile phone processing and tablet-based POS options for merchants courtesy of Clover. Moreover, Dharma offers the Clover Mini station, which includes Clover's PRO software set. The company also resells the Clover POS solution, including a full cash drawer, built-in fingerprint scanner, and printer.

Pricing Summary

Setup Fee: N/A

Monthly Fee: $20

Swipe Rate: N/A

Keyed-in Rate: N/A

Early Termination Fee: None

Contract Terms:

Ecommerce merchants, small businesses, and contractors
No setup fee.
No early termination fee.
Works with small businesses.
Month to month contract.
Works with merchants in the United States and Canada.



Best for

Small businesses

Specializes in

Online, retail, service industries

Pricing Summary

Setup Fee: $0

Monthly Fee: $20

Swipe Rate: Variable

Keyed-in Rate: Variable

Early Termination Fee: $0

Contract Terms:


What is Free Credit Card Processing?

Many payment processors advertise pricing plans that include no transaction fees for the merchant, and they call it free credit card processing.

Merchants see this as getting a service they really need for nothing at all.

But that’s not exactly the way it works.

Someone has to pay for the cost of processing transactions, but there are ways to pass those costs along to customers.

Is it Really Free?

We don’t want to get ahead of ourselves here, but no. It’s not completely free, and there will be some costs involved.

But, it can be much less expensive for the merchant if they choose the right company to work with. We’ll discuss this in more detail in just a minute.

Why Should You Opt for No-Cost Payment Processing?

Like most merchants, you want to keep an eye on your credit card processing costs. And free can sound pretty good when you’re trying to turn a profit.

Free payment processing can have a lot of benefits, but there are also some things about it that aren’t so good.


  • Free plans can eliminate at least some of your costs and save your business money.
  • You can have more predictability with regard to your cash flow.
  • Cash-paying customers can be rewarded for doing business with you.


  • Some customers may take their business elsewhere.
  • It may not be legal where your business is located.
  • You could end up paying additional fees to have this pricing plan.
  • You’ll have to post signs to inform your customers.
  • If not implemented properly, it could result in legal action or merchant account closure.

Types of Zero-Fee Credit Card Processing Pricing Plans

After reviewing the pros and cons, if you’re still interested in this method of processing payments, it’s important to know what’s available.

You basically have two different options.

Surcharge Pricing

If you have surcharge pricing, it means that any customer that pays with a credit card (note - not with a debit card) will be charged for the cost of transaction fees.

You will have to pay the transaction fees set by your credit card processor for every other type of payment, except cash, of course.

Cash Discount Programs

Sometimes people use the terms surcharging and cash discount program interchangeably, but there are some slight differences.

With surcharging, the customer pays a different price than advertised when they pay with a credit card. But with cash discounting, credit card customers pay the same price.

Cash-paying customers are the ones who see the benefits with this type of program because when they pay with cash, they’ll receive a discount.

You still have to post notices when you offer cash discounts to your customers, and this method often results in more customers who opt to use cash instead of credit cards to make their purchases.

How to Avoid a Free Payment Processing Scam

Like just about everything else in life, nothing is free.

Getting free credit card processing services may sound good to be true, and that may be the case, depending on the company you choose. There are a lot of scams out there, and it’s important to know how to spot them.

Don’t Be Fooled by Flat-Rate Pricing

Some processors may advertise flat-rate pricing plans that charge 4% to customers for all transactions. If your business is not considered high-risk, this percentage is much higher than it should be.

A lot of these companies think that you’ll look the other way with this high of a transaction fee because they’re not charging you, they’re charging your customers.

But your customers will care, and when they find out, they’re likely to take their business elsewhere.

Look for Promises of Eliminating 100% of Processing Costs

Even if your surcharging plan or your cash discount program operate exactly as they should, it’s very unlikely that you’re actually going to get rid of 100% of your credit card processing costs.

It will take care of some of them, but not all, so while 100% sounds good, it’s not really realistic.

Also, you’re still going to have to cover the cost of your equipment, chargebacks, etc. So there are going to be some fees that you’ll need to pay.

Check Your Statement Carefully

If you decide to go with a surcharge program, you’ll want to be very careful to make sure everything is set up correctly.

The program should run on your payment gateway or on the software you use with your credit card terminals and POS system. Your customers should see the additional charge on their receipts as a separate line item.

But there are some companies that surcharge every transaction, which means the program has not been implemented properly. You’ll want to fix this right away.

Questions to Ask Before Choosing a Free Credit Card Processor

As always, don’t be afraid to ask questions before making a commitment to a payment processing company. But there are also some questions you should be asking yourself too.

Do Your Competitors Use Surcharging or Cash Discount Programs?

If you can, find out what others in your industry are doing for their credit card processing. If they’re also doing surcharging or cash discounts, then it’s probably OK for you to do it too.

But if they’re not, then it’s possible that your customers could seek out their products and services instead of yours.

How Does Your Target Market Feel About Surcharging?

As you can see in the graphic above, most people aren’t too happy to learn that they’re paying more than others just because they check out with a credit card.

But this could vary, depending on what your target market is.

For example, if you have a high-end antique shop, most of your customers might not mind paying a surcharge for the convenience of using their credit cards. But the same might not be true if you operate a convenience store on the corner.

It will pay you to do a little research and find out what your customers are OK with and what they’re not.

What are the Other Fees You Will be Charged?

This is something else you need to think about - additional fees.

You want to make sure that the credit card processing company you choose isn’t charging you excessive fees to cover the cost of lost transaction fees.

For example:

Processor A offers a surcharge program that charges your credit card customers 3% on each transaction. You, the merchant, are charged $500 every year as an annual fee, and $50 every month as a monthly fee.

Processor B does not offer a surcharge program. They do not charge an annual fee, and the monthly fee is only $10, but it can be waived if your business meets a certain amount of processing volume.

Do you see the difference?

Take some time to shop around and find a good deal that won’t end up costing you more in the long run.

Free Credit Card Processing Vs. Cheap Credit Card Processing

Don’t feel too deflated if your thoughts of free payment processing services have been trampled after reading this. You don’t have to pay an arm and a leg just to be able to accept credit card payments.

There are some amazing, cheaper credit card processors out there that won’t charge you exorbitant fees, and that offer additional services that can save you money.

Take our word for it - free isn’t free, but cheaper is better as long as you pick the right processor.

Tips to Keep Your Processing Costs Low

Even if you don’t opt for surcharging or a cash discount program, there are still plenty of ways for you to keep the cost of processing payments down. Here are some tips that can help:

Find a Quality Merchant Services Provider

It helps to work with a quality merchant services provider that can help you with both a merchant account and credit card processing services.

Check out reviews (like this one) to find the right company to meet your needs. Additionally, you can check their BBB rating and any other feedback you can find online.

Don’t Sign Lengthy Contracts

One of the worst things that can happen is for you to sign a long-term contract (3-5 years) with a company and end up having to cancel their services early.

When this happens, unless there is a clause built into your contract ahead of time, you could end up paying a lot of money in early termination fees.

A lot of companies will charge around $500, but you could be on the hook for liquidated damages, which means paying out all of the money the processor would have received from working with your business.

It’s best to choose a company that offers short-term, month-to-month, or no-penalty contracts.

Choose a Company That Offers Free POS Systems and Equipment

You don’t have to necessarily lease brand-new equipment when you start working with a new payment processor. In fact, if you currently have the hardware, most of the time, re-programming it and integrating it with new software is very simple.

If you do need new hardware, it’s much cheaper to purchase it yourself.

Whatever you do, don’t get locked into a non-cancelable equipment lease.

We recommend finding a company that offers free hardware. They’re out there. And if you cancel early, many of them only require that you send the equipment back - no hard feelings and no penalties.

Don’t Abandon Negotiations

If you’re a new business without much of a payment processing history, you might find out that your transaction fees and other fees are a little higher than expected.

That’s normal, but it doesn’t have to be where the story ends.

Give yourself some time to get some processing history under your belt. Once you do, go back to the company and ask to renegotiate your contract.

If they don’t want to renegotiate, we can promise you that there are others out there who will.

Consider Setting Minimums for Your Customers’ Credit Card Purchases

By law, you can set credit card minimums of up to $10. This can help to increase your profits on smaller ticket items.

Don’t Forget to Check Out Our Recommendations for the Best Free Payment Processors