We compared the cheapest payment gateways for small businesses — Square, Stripe, PayPal, and Shopify Payments — looking at transaction fees, monthly costs, and which model (flat-rate vs. interchange-plus) saves you the most money.
Best for in-person businesses with no monthly fees, free POS software, and competitive flat-rate pricing at 2.6% + 10¢ for swiped transactions.
Industry standard for online payments with no monthly fees, powerful API, and support for 135+ currencies at 2.9% + 30¢ per charge.
Most trusted consumer brand with versatile payment options, no monthly account fees, and standard rate of 2.99% + 49¢.
Every small business owner knows the feeling: you look at your monthly processing statement and wonder where all the money went. Payment gateway fees nibble away at margins, and choosing the wrong provider can cost thousands a year. The good news? You don't have to accept the default. Whether you're running a coffee shop, a freelance design studio, or a growing ecommerce brand, the things actually worth buying are the gateways that balance low fees with the features you need.
We dug into the numbers — comparing flat-rate models against interchange-plus pricing, monthly fees, and real-world use cases — to find the four payment gateways that give small businesses the best deal in 2025.1
Before we get to the picks, it's worth understanding the two main pricing models because that's where the savings live.
Flat-rate pricing charges a single percentage plus a fixed fee on every transaction, no matter the card type. It's simple, predictable, and great for low-volume businesses. Square and Stripe both use this model.1
Interchange-plus pricing passes along the actual interchange fee set by the card networks (Visa, Mastercard, etc.) and adds a small markup. It's cheaper for high-volume merchants because you're not overpaying on premium-card transactions. PayPal and Shopify Payments offer variations of this model.2
The rule of thumb: if you process under $5,000/month, flat-rate is fine. Above that, interchange-plus almost always wins.
Square is the easiest way to start accepting payments with zero upfront cost. There are no monthly fees, no long-term contracts, and the hardware is free for basic setups.1
For in-person transactions, Square charges 2.6% + 10¢ per swipe/dip/tap. Online payments (keyed-in or via Square Online) run at 2.9% + 30¢.2 Those are flat rates — simple to understand, simple to budget.
Where Square really shines is the ecosystem: free POS software, inventory management, and even a free online store. If you're a retailer, restaurant, or service business that takes payments face-to-face, Square is the obvious starting point.1
Best for: In-person businesses, pop-ups, and anyone who wants to start accepting cards today with zero monthly commitment.
Stripe is the gold standard for online payment processing. It's the engine behind countless ecommerce stores, subscription services, and marketplaces — and for good reason.1
Like Square, Stripe charges 2.9% + 30¢ per successful card charge with no monthly fees.2 But the real value is in what you can build: Stripe's API lets you customize checkout flows, set up recurring billing, accept 135+ currencies, and integrate with hundreds of platforms.2
Stripe also offers competitive rates for international cards and digital wallets like Apple Pay and Google Pay. If your business lives online and you want control over the checkout experience, Stripe is the pick.1
Best for: Ecommerce stores, SaaS businesses, and anyone who needs a developer-friendly payment platform.
PayPal is the payment gateway customers already trust. With over 400 million active accounts worldwide, offering PayPal at checkout can increase conversion rates significantly.1
PayPal's standard rate is 2.99% + 49¢ per transaction (slightly higher than Square and Stripe), but there are no monthly account fees.2 The trade-off is worth it for many small businesses because PayPal's brand recognition reduces cart abandonment.
PayPal also offers PayPal Payments Pro ($30/month) for a hosted checkout experience, and PayPal Zettle for in-person payments. The versatility — online, in-person, invoicing, buy-now-pay-later — makes it a solid all-in-one option.1
Best for: Businesses that want maximum customer trust, international selling, and a familiar checkout button.
If you run a Shopify store, Shopify Payments is the no-brainer choice. It's built directly into the platform, which means zero transaction fees on top of your Shopify subscription — compared to 2.0% + 30¢ if you use a third-party gateway.1
Shopify Payments rates are 2.9% + 30¢ for online transactions (on the Basic plan) and 2.6% + 10¢ for in-person via Shopify POS.2 Higher-tier plans (Shopify, Advanced) get lower rates, down to 2.4% + 30¢ online.
The real savings come from avoiding the third-party surcharge. If you're already paying for Shopify, using Shopify Payments eliminates that extra 2% hit — which can add up fast.1
Best for: Anyone running a Shopify store who wants the lowest total cost and tightest integration.
| Feature | Square | Stripe | PayPal | Shopify Payments |
|---|---|---|---|---|
| Monthly Fee | $0 | $0 | $0 (or $30/mo for Pro) | Included in Shopify plan |
| Online Rate | 2.9% + 30¢ | 2.9% + 30¢ | 2.99% + 49¢ | 2.9% + 30¢ (Basic) |
| In-Person Rate | 2.6% + 10¢ | N/A | 2.29% + 9¢ (Zettle) | 2.6% + 10¢ |
There's no single "cheapest" gateway — it depends on how and where you sell.
Recomate earns affiliate commissions when you sign up through the links above. We only recommend payment gateways we've vetted for pricing, reliability, and small-business fit.
| Pick | Price | Monthly Fee | Online Rate | Best For | |
|---|---|---|---|---|---|
Square for Restaurants ▶ Pick | — | $0 | 2.9% + 30¢ | In-person / POS | Check price ↗ |
Stripe also good | — | $0 | 2.9% + 30¢ | Online / Developers | Check price ↗ |
PayPal for Business also good | — | $0 | 2.99% + 49¢ | Trust / Versatility | Check price ↗ |
Shopify POS also good | — | In plan | 2.9% + 30¢ | Shopify stores | Check price ↗ |
Want a follow-up the article didn't answer? Ask the engine — it carries the article's context.
Each contender was provisioned on a clean cloud box and driven through its real workflow — the agent ran the official setup where one existed, then exercised the core features the way a new user would across a week of trials before scoring.
| Best For | In-person / POS | Online / Developers | Trust / Versatility | Shopify stores |