​​As businesses today look to fight inflationary pressures and avoid passing more costs to the consumer, optimized credit card processing is more important than ever. With this in mind, franchises are often in a unique position due to the relationship between the franchisor and franchisee which can complicate their choice for determining the best credit card processing for their franchise.

Accepting payments is one of the most critical aspects of any business. Yet, many businesses often don’t dedicate the proper time and research to this important area of their operations.

Having the right payment options and credit card processing abilities can not only impact business operations but also a business’s bottom line as paying extra fees can really add up and start to erode profits. 

Sometimes, the parent company gives little direction to franchisees as to what payment solution they can use. Which can leave them in the dark as to what the best options are.

Even if the franchise recommends a preferred payment processor, this may not be the best option if they did not carefully research before coming to their decision.

In this article, we’ll go over the best credit card processing for franchises as well as the specific things business owners need to look for when deciding on the best merchant services for their franchises. 

Credit Card Processing

Those who are new to running a franchise may not be fully aware of what credit card processing companies are and the important role they play as a small business partner.

To understand the system involved in credit card processing for franchises, we’ll break it down into each component.

The Merchant 

In the case of a franchise, the merchant would be your business. Merchant’s capture customers’ credit cards either in-person through hardware (swiped, dipped, or tapped) or online.

The Merchant Account

To accept credit cards, a franchise or business will require a merchant account. This merchant account gives the franchisee access to the various payment options that fit the business. This can be either online payment options or in-person options such as credit card terminals, known as point of sale (POS) hardware.

Either way, credit card processing for franchises entails so much more than just accepting credit cards. The process behind it all involves many steps and players. The funds that the business receives through processing customer credit cards are transferred into this merchant account after one or so business days. The merchant can then withdraw the funds into their business banking account.

The Payment Processor

Credit card processors for small businesses and large franchises allow businesses to accept credit cards through a merchant account. But they also assist the business in many other ways. This is why it should be considered a partnership instead of simply a service that the franchise signs up for.

Your credit card processor (payment processor) is who you enter into an agreement with to obtain your merchant account. They are sometimes also referred to as the acquiring bank. An example would be a company such as ECS Payments which provides merchant accounts to franchisees and others.

Your payment processor will underwrite your merchant account. Which means assessing your risk and suitability based on card industry standards. The result of this underwriting is what determines many aspects of your processing, including the fee structure and any limitations you may have when it comes to credit card processing for your franchise. 

The underwriting or approval process is straightforward and only takes a few days in most cases. The processor may use your small business credit score or personal score and other details for the final approval.

Because of this, the payment processor plays an important role in how much you’ll be paying and how seamlessly you can process and withdraw funds. This means that choosing the right payment processor who works with you and understands your industry is vitally important.

The payment processor will also offer you access to the payment gateway, which we’ll discuss next.

Payment Gateway

A majority of your customer interactions and sales will likely be electronic. You should fully optimize this aspect of your business to take advantage of the best fee structure as well as services that support credit card processing for your franchise.

The payment gateway is essentially the network that you use to process credit card transactions online. It handles the flow of data as it moves from your business, through the payment processor, and ultimately to the cardholder’s issuing bank to be approved. Once the transaction is approved, the funds are moved to your merchant account.

What Makes a Good Payment Processor For a Franchise?

What makes for a good credit card processor for franchises? Well, interestingly, many franchisees are often left on their own when it comes to deciding on a payment processor. While some larger franchisors have preferred vendors for credit card processing for franchises that they work with, many do not suggest any processor and leave it up to the franchisee to make this important decision on their own.

But that’s not a problem and with a little research, you can find the perfect payment processor for your franchise location.

Below are some key areas to consider when choosing a payment processor for a franchise.

Customer Service

Customer service can be one of the main areas that differentiate a good payment processor from a bad one. As we mentioned earlier, your payment processor should be a partner, not just some random service you sign up for.

Good customer service from a payment processor should start right when you contact them. They should be able to understand your franchise and what it needs to be successful. This means they have experience with merchants in your industry and have an understanding of the kind of processing you will need.

Another thing to look for is if the payment processor has in-house customer support and technical support specialists. Some payment processors outsource this support or rely on the support of the various institutions involved in processing.

Always make sure the processor has their own support, such as ECS Payments. They have in-house experts to answer your questions and provide a point of contact you can rely on when you need assistance.

Processing Options

The next area to be aware of when deciding on the best provider for credit card processing for franchises is to make sure they offer all the options you need to accept the most payments.

For example, you may need specific POS hardware for your type of business. Your payment processor needs to offer these options as well as fully support them. Depending on the type of franchise you operate, you may also need to accept phone orders or down payments via the phone. In this case, you will need extra processing capabilities that allow your employees to run credit cards via virtual terminals.

Franchisees likely already know the payment situations that are most likely to occur at their business. By communicating these with an experienced payment processor, the payment processor can offer optimized solutions for credit card processing.

Online Options

Many franchises are restaurant or retail locations, but even in these cases, there is likely to be some form of online ordering or reservations that take place.

This means you will need online payment options as well to incorporate with your POS sales hardware terminals

Make sure your payment processor can specialize in both of these areas and offer solutions that work well for your specific business. For example, you may only need simple online transaction processing. However, for some businesses, you may need to use recurring billing for online sales depending on your business model.

Storing customer data for recurring billing can cause security headaches for small businesses, but a payment processor can provide solutions so that you can store this information with the payment gateway and avoid many of the security hassles you may otherwise have to deal with.

Whatever your requirements, a trusted payment processor can help you find the right solutions for your online payment needs. 


Integrations are another critical aspect of payment processing and something that can make your business run more smoothly.

Let’s say for example you are opening a franchise that remodels closets for homeowners. This type of business gives estimates and invoices to the homeowners so they can make a downpayment to begin the work.

Integrations will allow you to send these invoices electronically directly from your payment system and include payment links right within the invoice. Customers can click on these integrated payment links where they are taken to a secure page to complete the transaction. 

With the right integrations, these work on desktop and mobile and help your franchise business recieve payment faster. Not only that, the ease of payments makes closing sales much more likely as the customer only has to click a link to finalize the deal. With paper invoices or checks, customers can often get cold feet. Requiring more effort to close, or the sale may be lost.

Overall, optimized payment integrations can provide a huge boost for businesses and are something that your payment processor can help you with.

Gateway Options

The payment gateway for credit card processing is essentially the network that carries all of the customer credit card data between the different banks and institutions. Completing authorization and the transfer of funds. It’s a key part of the transaction flow and merchants should be able to choose which payment gateway they prefer for their unique situation.

When it comes to payment processors, make sure to choose one that offers different gateway options. Payment gateways are not always a one-size-fits-all type of situation. 

This can be especially true if the credit card industry considers your franchise high-risk. High-risk industries can be anything from debt consolidation products to health and fitness products or coaching.

Many franchises exist in these types of industries, both big and small, so you’ll definitely want a choice of gateways so you can use one that accepts high-risk transactions.

More Than Just Credit Card Processing

While most businesses think of credit card processing first, some businesses need to process checks. Some may not know that this can be an easy electronic process.

By choosing a payment processor that offers various ACH and eCheck services, merchants and franchises can save a lot of money and also improve the overall sales experience for their customers.

Sometimes customers write checks for certain high-ticket purchases or services. The problem is that paper checks have very high processing fees associated with them. If your business deals with a lot of checks the fees can really start to add up.

You can convert a paper check to an eCheck or ACH transaction at the point of sale and then process these checks electronically. ACH transactions have far lower processing fees than paper checks and you can also have access to the funds sooner.

For franchises that handle larger transaction amounts or deal in products and services that require down payments or structured payments, then ACH is often a much better alternative to credit card processing.

Your payment processor and your payment gateway handles ACH processes. So if your franchise has a business model and customer base that may use checks, make sure to ask about ACH transactions and how to integrate them into your payment systems.

Credit Card Processing And Software Compatibility

When looking for the best credit card processing solution a franchise will also want to consider what software they are already using for the business.

Depending on the franchise, you may be using software supplied by the franchisor. If this is the case, make sure to identify the name and type of software so you can discuss this with your payment processor and find a gateway or hardware that is compatible.

However, you may also be using the software that you selected. These can be things like bookkeeping software, customer relations management (CRM) software, or other tools in need of integration with your payment systems.

Most of the popular CRMs and accounting programs have various support for the different payment gateways and POS systems. But it’s important to confirm compatibility before signing any contract or moving forward.

Once again, this is where a trusted payment process with great customer service can help you. At ECS Payments, we work with franchisees all across the country. We are also experienced in most established software systems for businesses.

We can help you find the right gateway and solutions so you have perfect compatibility across all your systems.

Credit Card Processing For Franchisors

We went over the top issues for franchisees when seeking credit card processing solutions that fit their business. Now we want to touch on what the franchisor should be aware of if they want to provide credit card processing to their affiliate owners.

There are key areas to consider in this area and you’ll want to determine your goals for each as that will impact your decisions moving forward.

Profit Generation Vs Best Rates

First, you’ll want to consider whether your credit processing will be a source of profit generation. This means you will leverage your volumes to get reduced rates and then charge franchisees a fee on top of that for using this service for their credit card processing.

Of course, this method will generally not offer the best rates for franchisees. But, the additional revenue can be used to provide enhanced services in other ways. So each option has its own benefits that can work depending on your business model and what franchisees need to succeed.

Software Considerations For Payment Processing

All businesses run on software of some kind and a franchise operation is no different. Most franchise businesses will fall into one of three categories in regard to the software they use to run the business as well as what the franchisees use.

Below, we’ll cover these likely scenarios and what to do when looking for payment processing.

Custom Or Owned Software Solution

In this case, you’ve likely either purchased or had a software system developed for your business. This is generally the easiest situation when you begin looking for credit card processing as you have more control over the software and you likely already own it outright.

This assumes the software was developed well and already has key payment integration built-in or can easily be adapted to do so.

In these cases, you’ll likely be using the payment processor and the payment gateway APIs to integrate your payment solutions with the software you already have developed.

Through this method, you could also choose to provide individual merchant accounts to your individual franchisees. This is a far more complex situation and we suggest speaking to your payment processor about how to proceed. 

Another option is to centralize the payment system so payments are routed through one system. Franchisees then pay flat rates in this case and have an easier time setting everything up. Of course, this will likely make the franchisor the point of contact for support issues, and that may not be something they want.

In that case, the individual merchant accounts can be left up to the franchisees.

Leased Software

Some franchises also lease industry-specific software to run their businesses which they then distribute to the franchisees. In this case, the payment processor may be familiar with the software you are using. If not, you would need to contact the vendor and ask for documentation about payment systems and integrations.

The vendor should be able to provide details on what payment gateways the software works with and how to integrate them into your configuration. Share that information with your payment processor and they should be able to guide you on the next steps.

No software Option

It’s possible as a franchise you don’t run specific software and franchises can choose their own and simply report monthly or annual accounting data. 

In this case, each franchisee would likely obtain their own merchant account or you can provide certain hardware or software. Either way, your payment processor can easily work with you on this option and offer a fast application process for your franchisees to get a merchant account. 

Finding The Best Rates

Whether you use credit processing as a revenue generator or not, you will want to find the best rates you can.

As a franchisor, you have some negotiating power so you may be able to obtain better rates if you put some effort into the negotiations. However, depending on your industry, processing volumes, and other factors there may be less negotiating room for the payment processor.

Pricing structures will generally fall into two categories. It’s important to be aware of these categories so you can choose which one fits your business the best.

Cost Plus Pricing

With cost-plus pricing, the merchant is charged a fixed transaction fee on top of the normal interchange rates. The interchange rates are the base fees that the networks charge to cover the costs of the entities that are involved in processing credit cards. These fees can be between 1.5% to 3% normally, although they can be lower in some cases.

Cost-plus pricing adds a charge on the base interchange rates your payment processor is paying for each transaction. For higher ticket items, this pricing structure can lead to lower overall fees. 

This is why it’s important to understand your average ticket size so you know which pricing structure will work the best during your negotiations.

Flat Rate Pricing

Flat rate pricing is when you simply pay the agreed-upon percentage for every transaction. This works well for businesses with mostly small transaction sizes but higher volumes. The flat rate structure allows businesses to more effectively and transparently set their own prices for goods and know what the profit margins will be after fees.

Whichever pricing structure you choose, it’s important to understand that rates can vary depending on the category of the transactions. Your total monthly volumes and average ticket size will also play a role in your total fees.

Finally, whether or not most of your card transactions are swiped (in-person) or online may also play a role in deciding your rate structure.

Finally, there may be other fees such as foreign transaction fees which may be applied to certain transactions.

If you’re a franchisor and need payment solutions for your franchisees, contact ECS Payments to speak with one of our payment solution experts. We can work with your existing technology infrastructure and find the right solution that offers you the most payment options at the best possible rates.

Common Payment “Services”

You’ve likely encountered some of the mainstream processors that advertise online or on television. These include payment options like Paypal, Stripe, Amazon Payments, Square, and others.

These are fairly common but they are not really the best suited credit card processing for franchises or physical business locations.

Aggregate Merchant Accounts

To begin, many of these are aggregated merchant accounts. What that means is that all the merchants using the system, such as Square, are all essentially sharing the same merchant account.

Square and others do this so they can pool their risk and take on new merchants with very little vetting. This works out well for Square or Paypal and others, but not so much for the merchant.

To begin, by using an aggregated merchant account, you give up a lot of control over your own processing. Since it’s not your own merchant account, you are at the whim of your processor. This means the gateway can drop your account of hold your funds for any reason and at any time.

Poor Customer Support

There is also the issue of customer support. Most of these services have outsourced support that is difficult to get a hold of. Even when you do get a hold of someone, the service is very basic as they don’t know you or your business personally.

These aggregate merchant account providers are best for very small businesses that simply need to set up processing very quickly and don’t want to take the time to research a more well-suited payment processor. That’s fine and the aggregated merchant accounts fill a niche, but these aren’t good options for a franchise owner.

A franchise owner generally is running a much more serious business. They have contracts and have likely taken out financing to open the franchise location. In this situation, you can’t leave your payment processing up to an aggregated service despite them being a well-known brand.

Having a dedicated merchant account will not only save you money in the long run, but you’ll also have more flexibility, better service, and more security knowing that your account is fully under your control.

Credit Card Processing For Your Franchise

If you own a franchise and need credit card processing, there are a lot of options out there and they can sometimes feel a bit overwhelming. But you need the best credit card processing for franchises.

This is why you need a trusted name in processing like ECS Payments. We work with both franchisees and franchisors to offer them the latest payment solutions that help their businesses succeed.

Contact ECS Payments today and let us help your franchise business succeed with the right payment solutions at the best possible rates.