Learn how payment processing systems work, see the best options for small businesses, SaaS, HSA and FSA cards, and A2A payments, and find out how Swipesum helps you choose and negotiate the right solution for your business.
If you run a business in 2025, it is almost impossible to avoid the topic of payment processing systems. Taking cards, wallets and bank payments is no longer a “nice to have.” It is the backbone of how you make money. Yet when most owners start researching, they are hit with dashboards, acronyms, percentage fees and terms that all sound the same.
At Swipesum, we sit on the merchant’s side of the table. We talk to founders, CFOs and operations teams every day who are trying to decide if they should stay with Square, move to Stripe, add a niche solution for HSA cards, or embed payments directly into their software. This guide is the version of that conversation we wish every business owner could hear before signing a long contract.
We will walk through what payment processing systems are, how they work, the main types on the market, and the systems that are actually worth your attention. Most important, we will show you a practical way to choose the right setup for your business and explain where Swipesum can take that work off your plate entirely.
A payment processing system is the combination of software, financial partners and rules that moves money from your customer to your bank account when someone pays you. There is usually a visible part, such as the card reader on your counter or the “Pay now” page on your website, and a hidden part that does all the talking between banks and card networks.
In a simple card transaction, your system securely captures the card or wallet details, sends them through a payment gateway, and then on to a processor. The processor routes the request through a card network such as Visa or Mastercard, and finally to the customer’s bank. The bank decides whether to approve or decline the purchase and sends that answer back along the same path. Later, approved transactions are “captured,” batched together, and settled into your merchant account, then paid out to the bank account you control.
When this chain is well designed, payments feel instant and boring. When it is not, you see declined transactions that should have been approved, long funding delays, surprise chargebacks and monthly statements that nobody can fully explain. Choosing a payment processing system is really a decision about which set of partners and rules you want behind the scenes of every sale.
It helps to imagine a real world example. A customer walks into your store, picks up a product and taps their card on the terminal. In the few seconds before you hand them a receipt, several things happen.
First, the terminal encrypts the card details and passes them to your payment gateway or directly to your processor, depending on how your system is configured. That processor checks basic things such as whether the format of the data is valid and whether this transaction appears to come from your business. Then it packages the request and sends it through the card network to the customer’s issuing bank.
The bank looks at the account. It checks whether the card has been reported lost or stolen, whether there are enough funds or credit available, and whether this purchase fits normal behavior for that cardholder. If everything looks good, the bank places a hold on the funds and returns an approval code. If something looks off, you get a decline instead. Your system then shows a simple green or red result to your staff or to the shopper online.
Later, usually once per day, your approved transactions are captured in a batch and sent for settlement. The card network and banks move money through their internal accounts so that, after fees, funds end up in your merchant account. Your processor then deposits the money into your business bank account on the agreed payout schedule. For account to account payments such as RTP or FedNow, there is no card network in the middle. Money moves directly between bank accounts, often in real time, which introduces new benefits and new kinds of risk.
Most of this happens automatically. The choice you make is which companies you trust to run each piece and how much control you want over cost, risk and integration.
Different systems exist because different types of businesses care about different things. A new coffee shop wants speed and simplicity. A vertical SaaS platform wants control and revenue share. A health and wellness ecommerce brand might care about HSA and FSA eligibility more than anything else.
You will typically run into four broad categories.
All in one processors, sometimes called payment service providers, bundle the merchant account, processing and often point of sale software into a single package. Square is the classic example here. You sign up online, plug in their terminals, and you are taking payments within days.
The upside is simplicity. You have one login, one support number and a predictable fee across nearly all transactions. This makes budgeting easy and keeps technical work to a minimum. The tradeoff is that you usually pay a higher effective rate and have less control over things like interchange optimization, custom pricing, or how disputes are handled.
These systems are often perfect in your first few years of doing business. As your volume grows and your needs become more complex, you may want to look at more flexible options.
Traditional processors and acquiring banks give you your own merchant account and more granular control over how transactions are priced and routed. This route often includes a separate gateway and can take longer to set up because you are fully underwritten as a merchant. In exchange, you can negotiate the markup above interchange, design custom pricing for different business units and sometimes access better tools for large ticket or high risk categories.
For businesses processing significant volume, even a few basis points of savings can translate into six or seven figures over time. The challenge is that comparing these offers is difficult and requires understanding line items that most people never see until the contract is already signed.
If you run software, especially vertical SaaS, payments are not just a cost. They are part of your product and revenue model. Platforms like Zift.io offer embedded payment infrastructure and PayFac in a box capabilities that let you onboard your own merchants, share in the revenue and keep the payments experience inside your product.
Instead of sending your customers to a third party checkout, you own the journey and can design pricing that makes sense for your industry. You get much of the economic benefit of becoming a payment facilitator without taking on all of the regulatory and operational burden yourself. For many SaaS companies, this is the natural evolution after starting with something like Stripe.
There is a growing ecosystem of specialized payment systems that solve narrow but important problems. HSA and FSA focused systems help businesses accept tax advantaged health spending without violating eligibility rules. Account to account systems focus on real time bank payments and reconciliation inside ERPs. Contract and invoicing platforms combine agreements, signatures and payments so you can move from “yes” to “paid” without juggling multiple tools.
You will rarely run your entire business on these niche systems, but they can unlock new revenue or solve acceptance problems that general purpose processors cannot handle gracefully.
With that context, let us look at specific systems that are worth considering and how they fit together. This is not a paid ranking or an affiliate list. It is a short map based on the systems we actually see merchants using, and the patterns that repeat in our consulting work.
Swipesum is a bit different from everything else in this list. We are not a single gateway or bank. We act as your independent payments team. That means we sit on your side of the table and help you choose, negotiate and manage the mix of processors, gateways and specialized tools that fits your business.
In a typical engagement, we start by mapping your current setup. We look at where and how you accept payments, which systems you already rely on, and what you are actually paying once all fees are added up. Then we identify the processors and platforms that integrate cleanly with your software, run a structured RFP, and compare proposals in a way that compresses all of that fine print into numbers you can understand. Once you choose a direction, we help with integration, training and ongoing monitoring.
Swipesum is a strong fit if your processing volume has grown beyond the “set it and forget it” stage, if you answer to a finance team or investors who care about margins, or if your staff is tired of being passed back and forth between different providers every time something goes wrong. Instead of hiring in house experts across risk, pricing and support, you get a ready made team that does this full time.
Square is often the first payment processing system a small business encounters, and there is a good reason for that. The sign up process is quick, the hardware looks good on a counter and the software covers a lot of ground with point of sale, inventory, basic reporting and ecommerce tools.
For many coffee shops, salons, pop up retailers and service providers, the biggest value from Square is that it removes a dozen small decisions. You do not spend weeks reading contracts or comparing dozens of line items. You plug the terminal in, accept the flat rate for most transactions, and focus on serving customers.
There are limits. As your volume grows, the flat rate that once felt simple can start to feel expensive compared with interchange plus pricing. If you need more flexibility in your POS, or your online and in person systems need to live in different software, you may start to feel boxed in. That is usually when businesses come to Swipesum and ask whether they should renegotiate, move some volume to another provider or architect a hybrid setup.
Stripe became the default option for developers and online businesses because it combines strong APIs, fast onboarding and global acceptance into one package. If you are launching an app or SaaS product and want to accept cards, wallets and subscriptions with minimal friction, Stripe is often the path of least resistance.
From a payments strategy perspective, the important thing is to treat Stripe as a phase, not a permanent identity. Early on, the tradeoff of higher effective rates in exchange for speed and flexibility usually makes sense. Over time, especially once you are running significant volume or expanding into new regions, it is worth asking whether the default configuration is still the best economic and operational choice.
This does not always mean leaving Stripe. It can mean using Stripe differently, adding a PayFac in a box provider for part of your customer base, or negotiating a custom deal based on your volume and risk profile. The key is that you should consciously design your payments stack, not just inherit it from your first engineering decision.
Zift.io is built for software platforms that want to embed payments directly into their product and participate in the economics. Instead of sending users off to an external provider, you can onboard them inside your app, control the checkout experience and share in the revenue that flows through the system.
From the merchant’s perspective, the benefit is a more seamless experience: their billing, reporting and payments all live in the software they actually use to run their business. From your perspective as the software provider, the upside is an additional revenue stream and a stronger competitive moat.
The main questions to ask with a platform like Zift.io are about fit. Does the onboarding flow match how your industry sells and bills customers. Can the settlement and reporting adapt to your pricing model. Do you have a clear view of what regulatory and support responsibilities remain on your side versus what the provider handles. A partner like Swipesum can help you compare Zift.io with other PayFac style options and model the long term economics before you commit.
Agree.com focuses on the contract to cash journey. Many businesses, especially creative studios, agencies, small law firms and consultants, live in a cycle of proposals, revisions, approvals and invoices. In those environments, the problem is not just taking a card. It is getting from “yes” to a signed agreement, and then from that agreement to predictable payment.
By bundling AI assisted contracts, free signatures, invoicing and payments, Agree.com removes several friction points that would otherwise live in separate tools. Your client reviews and signs the agreement, the system can automatically generate the right invoice schedule and your payment processing stays tied to the underlying contract terms.
For businesses where every project or engagement starts with a written agreement, this kind of workflow tool can be more valuable than a generic online checkout. It reduces the number of times clients stall or get lost between steps, which improves both revenue and client satisfaction.
Health savings accounts and flexible spending accounts represent a large and growing pool of consumer spending, but accepting these payments correctly is not as simple as turning on card acceptance. Only certain items are eligible, there are rules about documentation and split tender transactions can be confusing.
Flex is a good example of a specialized payment system designed specifically for HSA and FSA cards. When integrated correctly, it can identify eligible products, apply HSA or FSA funds where allowed and route any remaining amount to a regular payment method. That keeps you compliant and makes the experience smoother for shoppers who want to use their benefits.
This type of system often sits alongside your main processor. You still run standard card and wallet payments through your primary gateway, but you use Flex to unlock a category of spend that might otherwise be difficult to access.
Account to account and real time payment platforms focus on moving money directly between bank accounts rather than over card networks. When combined with ERPs like NetSuite, Microsoft Dynamics or SAP, they can dramatically imp
The most overlooked step in choosing a payment processing system is also the most practical. Before you fall in love with any logo, you should list the software you cannot live without and see which payment providers already integrate into those tools.
If you rely on a specific ERP, point of sale, ecommerce platform or practice management system, that software usually has a short list of supported payment providers. You can find that list by looking at the vendor’s website, searching their app marketplace or asking their support team. Once you have that list, you are not choosing from the entire payments industry. You are choosing from the subset that will actually work without custom development.
From there, the smart move is to run a simple RFP process. Ask each provider on that list for real pricing that includes transactional, monthly and incidental fees. Confirm how the integration works, which features are available with your exact setup and what the contract looks like over multiple years. The goal is not to become a payments attorney. The goal is to get comparable offers in a format your team can understand.
Swipesum does this every day. We already know which processors and gateways play nicely with most major software stacks, and we have a process for collecting and comparing offers that removes a lot of guesswork. If you would like that work handled for you, our team can run the RFP, interpret the results and sit with you to choose a path that fits your priorities.
Headline rates are the beginning of the conversation, not the end. When we audit merchant statements, we often find that the number everyone quotes at the start tells only part of the story.
Real cost includes the percentage and per transaction fees for different card brands and entry methods, plus monthly fees for the account, the gateway and any extra features such as tokenization or recurring billing. There may be PCI compliance charges, chargeback fees, cross border markups and additional assessments that show up only in the fine print. Hardware costs, especially leased terminals, can also add up over time.
Contract terms matter just as much as pricing. Auto renewal clauses, volume commitments and early termination penalties can lock you into a suboptimal setup for years. Ask what happens if your volume changes, if you expand into new countries or if you decide to bring in an additional provider later. The more flexibility you can build into the contract up front, the less painful it will be to adjust as your business evolves.
This is the point where many owners decide that having a payments expert on their side is worth it. The savings from a well negotiated agreement often cover the cost of that expertise many times over.
Every payment processing system will tell you that they are secure, but your responsibilities do not disappear when you sign up. You still have to understand what part of PCI compliance falls on you, how your staff should handle sensitive information and what your plan is when disputes arise.
Hosted payment pages and tokenized card data can reduce your PCI scope, but they do not remove it completely. If you handle card information over the phone, key cards into virtual terminals or store customer data in other systems, those processes need to be considered as part of your risk posture.
Fraud and chargebacks are another area where the choice of system and configuration matters. Tools such as 3D Secure, network tokens, velocity checks and custom rules can dramatically cut down on losses, but they need to be tuned to your business. Too strict, and you will decline legitimate customers. Too loose, and fraudsters will find you quickly. The right balance is different for a digital goods seller, a physical retailer and a B2B invoice heavy business.
Real time account to account payments introduce a different risk profile. These transfers are often final. That means you need a clear onboarding and verification process, especially for new or high value customers, and good internal controls before staff can send or approve payments.
A capable payment partner will not only provide tools but also help you configure them and adjust as your patterns change.
You can certainly go provider by provider, read marketing sites and talk to sales reps. Many businesses do that and land on something workable, especially in the early years. It is usually worth bringing in a payments expert when any of the following are true:
In those situations, the cost of settling for the first “good enough” solution is usually higher than the cost of getting expert help. That is exactly the gap Swipesum exists to fill.
Choosing a payment processing system does not have to mean becoming a part time payments analyst. What you need is a clear understanding of your own business, a realistic short list of systems that work with your software, and a partner who can translate contracts, proposals and technical jargon into simple decisions.
Swipesum serves as that partner. We review your current setup, identify the systems that fit your stack, run the RFP process, negotiate on your behalf and help you implement the winning option. Afterward, we stay involved to monitor fees, chargebacks and performance so that your payments stay optimized as your business changes.
If you are ready to stop guessing and start treating payments as a strategic part of your business, book a consultation with a Swipesum payments expert. We will walk through your options, show you where you can save or improve reliability, and help you design a payment processing system that works for you instead of the other way around.
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Michael Seaman
Michael Seaman is the co-founder and CEO of Swipesum. A veteran of the payments industry and former employee at one of the largest payments companies, Michael, along with his brother Stephen, has led Swipesum since its inception in 2016. Swipesum is committed to providing innovative payment solutions and exceptional service to its diverse clientele. In his free time, Michael enjoys traveling with his wife Kelsey and their three children, pole vaulting, and engaging in typical Midwestern dad activities.
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