How Gravity Payments Works and What It Costs Your Business
What Gravity Payments does and who uses it
Gravity Payments is a payment processor that handles credit card transactions for small and medium-sized businesses. The company takes payment information from your customers, routes it through the card networks (Visa, Mastercard, American Express, Discover), and deposits the money into your business bank account. They charge a fee for this service—usually a percentage of each transaction plus a flat per-transaction fee.
Gravity Payments also offers point-of-sale systems (the hardware and software you use to ring up sales), invoicing tools, and payment links you can send to customers. The company markets itself primarily to small businesses, restaurants, and service providers who want an alternative to larger processors like Square or Stripe.
The company is based in Seattle and has been operating since 2010. They are known for a 2015 decision to raise their minimum employee wage to $70,000 per year, which generated media attention but does not directly affect how their payment processing works for your business.
Key Takeaways
- Gravity Payments charges a percentage of each transaction (typically 2.2% to 2.9%) plus a per-transaction fee, with the exact rate depending on your card type and sales volume.
- You can use Gravity Payments for in-person sales (with their card reader), online payments (with payment links or a shopping cart plugin), or invoices sent to customers.
- Setup usually takes a few business days after you submit your business information and banking details, and there is no long-term contract requirement.
- Gravity Payments holds your money in a settlement account and deposits it to your bank account, typically once per business day.
- If you want to leave, you can do so without penalty, but you will need to move your payment processing to another provider and update any payment links or integrations you have set up.
How Gravity Payments charges you
Gravity Payments uses a tiered pricing model, meaning your rate depends on the type of card being used. Credit cards (which carry higher fraud risk) cost more to process than debit cards. The company publishes rates on their website, but the exact percentage you pay depends on your industry, sales volume, and the specific cards your customers use.
In addition to the percentage, you pay a flat fee per transaction—usually between $0.10 and $0.30. Some plans bundle these costs differently; for example, a flat monthly fee plus a lower per-transaction rate. You should ask Gravity Payments for a rate sheet specific to your business type before signing up, because the difference between one processor and another can add up quickly if you process thousands of transactions per month.
Gravity Payments does not charge a monthly account fee on most plans, but they may charge fees for things you do not use—like PCI compliance fees, gateway fees if you use their online payment tools, or fees to add extra users to your account. Read the full fee schedule they send you before you commit.
Setting up an account and getting paid
To open an account with Gravity Payments, you provide your business name, tax ID, bank account information, and a few details about your annual sales volume. The company runs a background check and verifies your bank account. This process usually takes two to five business days.
Once approved, you receive a card reader (if you chose an in-person plan) or access to their online payment dashboard. You can then start accepting payments. Money from each transaction goes into a settlement account held by Gravity Payments, and then deposits into your business bank account—usually the next business day, though timing can vary depending on when transactions settle and your bank's processing speed.
If you process a refund or a customer disputes a charge, Gravity Payments deducts that amount from your settlement account. You should monitor your settlement account regularly to catch errors or unexpected holds.
In-person, online, and invoice payments
Gravity Payments offers three main ways to take payments. In-person payments use a small card reader that connects to your phone or tablet via Bluetooth. You swipe, insert, or tap the card, and the payment processes immediately. This works well for retail stores, food trucks, service providers, and any business where customers are physically present.
Online payments can be taken through payment links (a URL you send to a customer via email or text), a shopping cart integration (if you have a website), or their invoicing tool. You create an invoice, send it to the customer, and they pay through a secure page. Gravity Payments integrates with some popular website platforms, but not all—check their list before you sign up if you already have a website.
Invoice payments let you create and send invoices directly through Gravity Payments. Customers receive a link, pay online, and the money settles to your account. This is useful for service businesses, consultants, and anyone who bills after work is completed rather than at the point of sale.
What happens if you want to switch processors
Gravity Payments does not require a long-term contract, so you can leave whenever you want. However, switching payment processors involves real work. You need to update any payment links you have shared with customers, change integrations on your website, and notify customers of any new payment methods. If you use Gravity Payments' point-of-sale system, you will need to set up a new system with your new processor.
Before you switch, make sure your new processor can handle your specific needs—online payments, invoicing, in-person sales, or a combination. Some processors are stronger in one area than another. Also confirm that your new processor integrates with any other software you use (accounting software, inventory systems, scheduling tools).
Gravity Payments will not hold your money hostage during a switch, but they may take a few business days to process your final settlement and close your account. Plan the transition during a slow business period if possible.
Comparing Gravity Payments to other processors
The payment processing market includes many competitors: Square, Stripe, Toast, Clover, and others. Each has different strengths. Square is known for simplicity and low barrier to entry. Stripe is popular with online businesses and developers. Toast specializes in restaurants. Clover offers a full point-of-sale system.
Gravity Payments sits in the middle—they offer in-person, online, and invoicing tools, so they work for multiple business types. Their rates are competitive but not always the lowest. The real difference between processors often comes down to which integrations matter to you, how much customer support you need, and whether you prefer a simple setup or more advanced features.
To compare, ask each processor for a rate quote based on your actual sales volume and card mix. A processor that charges 2.5% on $50,000 in monthly sales costs you $1,250 per month—so a 0.3% difference between two processors means $150 per month, or $1,800 per year. That math is worth doing before you choose.
Frequently Asked Questions
Does Gravity Payments hold my money or put it on hold?
Gravity Payments deposits your settlement to your bank account daily in most cases, so they do not hold your money long-term. However, they do hold it briefly in their settlement account while transactions process and clear. If a customer disputes a charge, Gravity Payments may hold that amount while the dispute is investigated—this is standard across all processors.
Can I use Gravity Payments if I have bad credit or a past processing issue?
Gravity Payments runs a background check and may decline you if you have a history of fraud, chargebacks, or other high-risk activity. If you are declined, ask them why and whether you can reapply later. Some processors specialize in higher-risk businesses, but they charge higher rates.
What if a customer's card is declined?
When a card is declined, Gravity Payments tells you immediately. The transaction does not go through, and you are not charged a fee. You can ask the customer for a different card or payment method. Some businesses retry declined cards automatically; check Gravity Payments' settings to see what options are available.
Do I need a separate merchant account?
No. Gravity Payments acts as your merchant services provider, meaning they handle the merchant account for you. You do not need to set up a separate account with a bank or another company. This is one of the reasons payment processors like Gravity Payments are simpler than older payment setups.
What if I process very few transactions per month?
Gravity Payments has no minimum monthly transaction volume, so you can use them even if you process only a handful of payments per month. However, if you process very few transactions, the per-transaction fee becomes a larger part of your cost. For example, if you process only five transactions per month at $0.30 each, that is $1.50 in fees before the percentage charge. Compare this to a processor with a flat monthly fee to see which model works better for your volume.