Credit Card Processing With No Monthly Fees
Some processors advertise a $0 monthly fee. Here is what their own pages say you pay instead, and how to tell if it wins for your sales.
A processor that says "no monthly fee" is not saying "no cost". Every card sale still takes a cut. The monthly line is only one of the bills. Here is what the phrase means, what each company's own page says, and how to run the math on your own sales.
What "no monthly fee" means, and what it doesn't
A monthly fee is a fixed charge you pay whether you sell anything or not. A no-monthly-fee plan drops that fixed charge. You still pay per transaction. A percentage of each sale plus a flat amount goes to the processor every time a card runs.
So the trade is simple. Some plans on these pages charge by the month and list lower per-sale rates. Which one costs less depends on how much you sell. That is the whole question, and the answer is different for every shop.
Which processors' own pages say no monthly fee
Stripe's pricing page says Stripe does not charge setup fees, monthly fees, or hidden fees like closure fees on its standard plan.
Square's pricing page says with Square Free there are no monthly subscription costs, and you only pay processing fees when you take a payment. Its plans start at no cost and have no hidden fees or locked-in contracts. You can cancel or switch plans anytime.
PayPal's fee page says the monthly fee is no fee for Advanced Credit and Debit Card Payments and ACH Services.
Shopify's pricing page says there are no setup fees on any of its plans, but its plans do carry a monthly price. The Basic plan is $29 a month when paid yearly, and card rates start at 2.9% + 30¢ USD.
Its pricing page says it charges a $25 monthly fee for all plans, with a $0 sign-up fee.
What you trade for a $0 monthly fee
Here is what the per-sale rates look like on each page.
Stripe's pricing page says its standard online rate is 2.9% + 30¢ per successful transaction for domestic cards. Its in-person card payments cost 2.7% + 5¢ per successful transaction for domestic cards.
Square's pricing page says in-person card payments run from 2.6% + 15¢ to 2.4% + 15¢, depending on the plan. The monthly fee per location is $0, $49 or $149, and the higher tiers, Square Plus and Square Premium, charge it per location.
PayPal's fee page says standard credit and debit card payments cost 2.99% plus a fixed fee. That fixed fee is 0.49 USD for US dollar transactions.
Shopify's pricing page lists a ladder of plans. Its pricing page says the Grow plan is $89 a month with card rates starting at 2.7% + 30¢ USD. The Advanced plan is $359 a month, starting at 2.5% + 30¢ USD. Pay more per month, take less per sale.
When a monthly fee can cost less: the volume math
Say a plan with no monthly fee takes 2.9% + 30¢ per online sale, and a plan with a monthly fee takes a lower rate. At low sales, the no-monthly-fee plan wins because you pay nothing in slow months. At high sales, the lower rate catches up, passes the monthly fee, and keeps saving you money on every sale after that.
There is a crossover point where the two plans cost the same. Below it, the $0 monthly fee wins. Above it, the monthly fee wins. Authorize.net's page says the included lower transaction rates typically offset the monthly fee for businesses processing more than a certain amount per month. That is the same idea: the fixed cost pays for itself once volume is high enough.
Fees that show up even when the monthly fee is $0
A $0 monthly line does not mean every other fee is $0.
Manually typed cards cost more. Stripe's pricing page says manually entered cards add 0.5% to the online card rate. Square's pricing page says manual entry or card on file payments cost 3.5% + 15¢.
Foreign cards cost more. Stripe's pricing page says international cards add 1.5% and currency conversion adds 1%. PayPal's fee page says international commercial transactions add a 1.50% fee. Square's pricing page says an additional fee applies to payments made on cards issued outside of the United States.
Optional services can carry monthly prices of their own. PayPal's fee page says its Recurring Billing optional service costs 10.00 USD per month. Its Recurring Payment Tool optional service costs 30.00 USD per month.
Refunds deserve a look too. Stripe's pricing page says businesses on standard pricing may face refund fees when bank transfers are used. For all other payment methods, there are no refund fees.
And a monthly fee is not the same as a contract. Authorize.net's pricing page says it has no contract requirement and no early termination fees, even though it charges monthly. Square lets you cancel or switch plans anytime. A monthly fee does not lock you in by itself.
How to compare plans with your own sales numbers
Take last month's card sales and your average ticket. For each plan, multiply total sales by the percentage rate. Then multiply your transaction count by the flat amount. Add any monthly fee. That total is your real monthly cost on that plan.
Run it twice: once on a good month, once on a slow month. A monthly-fee plan hurts in the slow month. A higher per-sale rate hurts in the good one. If your sales swing hard between seasons, weight the slow months more.
Check the add-ons you actually use. If you need recurring billing, that optional service fee belongs in the math. If you take phone orders, use the manual-entry rate, not the card-present one. The rate that matters is the one for how you actually take payments.
Published prices change. Confirm every number on the processor's own page on the day you sign up. For a closer look at how a single sale gets cut, see a forty dollar sale at the counter. If speed matters more than the monthly line, paying to be paid tonight covers what fast payouts cost.