How to Accept Credit Card Payments: A Beginner’s Guide

How to start accepting credit card payments for your small business

Accepting credit and debit cards begins with selecting a processor. “Overall, the process will look like this,” explained Branden Korf, marketing associate at EBizCharge, a payment processing company. “Choose a payment processor that suits your needs, set up a business bank account and select the right payment system.”

Here are the steps you should follow.

1. Determine the type of processor you need

When choosing a credit card processor, you must evaluate your business’s unique needs. “Factors like business size, transaction volume, fee structures and security requirements should guide the decision,” said Todd Weiss, director of product at PayJunction.

For example, our PayPal review and Square review show how these processors work well for new businesses with low transaction volumes because they don’t charge many of the fees you’d incur with other processors. However, their credit card processing rates are higher than many competitors, so they’re not always a cost-effective choice for high-volume businesses.

Editor’s note: Looking for the right credit card processor for your business? Fill out the below questionnaire to have our vendor partners contact you about your needs.

“If you’re running a high-volume business, processors with lower transaction fees can significantly reduce costs,” said Weiss. “On the other hand, if simplicity and speed are priorities, look for providers offering no-code integrations for seamless onboarding and payment acceptance. My advice is to avoid unnecessary complexity and opt for an all-in-one solution that consolidates billing, support and a single point of contact. It makes life easier and keeps your business running smoothly.”

When you evaluate payment processors, determine if their rates, service and technology meet your business’s requirements:

• Competitive rates: Don’t always look for the lowest rate possible. Some advertised rates are deceptively low because they apply only to specific transactions. Many processors also charge various monthly and annual fees that you must consider when comparing costs.
• Knowledgeable and available customer service: What will you do if your payment technology stops working during peak business hours? What’s the backup plan for processing cards? How will it get fixed and how can you reach your processor’s customer service? You can’t afford to have downtime, so you need a processor to support you when needed.
• Fast, secure and reliable payment equipment: There are many payment equipment solutions on the market but not every processor offers every kind. A processor can help you decide which equipment is best for your business.

2. Consider how you will accept credit cards

Most businesses accept credit cards to accommodate their customers, so it’s crucial to consider how your customers use their cards. If the vast majority come into your physical location and swipe their cards, that may be the only payment method you need to accept. However, you might also want to accept credit cards online, over the phone, on a mobile device or across multiple channels. Determining the payment methods you’ll accept will help you choose the best credit card processing solutions for your business.

You also may want to accept contactless payments. The COVID-19 pandemic accelerated the popularity of near-field communication (NFC) technology, which facilitates contactless payment methods, such as Apple Pay, Google Pay, Samsung Pay and contactless credit cards.

Consumers like the convenience of tapping their cards or holding their smartphones close to a payment terminal. NFC mobile payments make checkout faster, are easy to implement and can help deepen consumer engagement.

3. Examine pricing models and fee structures

Pricing models and fee structures vary greatly by processor, so this is one of the more arduous parts of the buying journey. There are different options for pricing models that determine the fees you’ll pay on specific transaction types.

Most processors charge 2 percent to 4 percent of the transaction value, plus a small transaction fee based on your monthly processing volume, average ticket size, industry and processing history. In addition, processors often charge several other fees.

4. Compare quotes

Using the criteria above, narrow your list of candidates to three options. Then, contact each credit card processor to request a quote. A processor’s rates are sometimes negotiable, so don’t be afraid to haggle, especially if you’ve already received estimates from other companies.

After comparing quotes, request a contract from one or two companies that offer the most competitive rates. However, keep in mind that the lowest rate is not always the best. Consider what else each company offers to add value to your service.

Do not complete an application until you’re ready to sign up with a company. If you read the fine print, you’ll discover that the application is part of the contract and by signing it, you’ve agreed to accept the company’s services.

5. Review contracts

As always, review these contracts very carefully as some companies try to hide fees. If something does not look right to you, ask about it. If possible, have legal counsel review the contract to ensure everything is above board. Consider whether the contract includes automatic renewal clauses, early termination fees and other binding language. Once you’ve determined that the contract is fair, sign with the company you believe is the best fit for your business.

Once you’ve completed these steps and decided which credit card processor you’d like to partner with, you’re ready to apply. Generally, applications can be submitted online and take two days for the processor to review.

Once your application is approved, the processor will set up your account and walk you through the process of selecting the hardware you need. When the hardware arrives, the processor will help you set it up and test it. 

Korf provided business.com with an example of what a small business, such as a local coffee shop, should take with each step. “A local coffee shop looking to accept credit card payments would start by choosing a payment processor like Square, which offers simple pricing and integrates easily with a tablet-based POS system,” he said. “The shop would set up a business bank account, ensure their system is PCI [Payment Card Industry]-compliant and get a card reader for in-person payments. After training the staff on how to use the system, the coffee shop would be ready to process payments securely and offer customers the convenience of paying by card.”

How to accept credit cards at a fixed location

When you have a brick-and-mortar business location, you’ll probably want a standard hardwired credit card reader or a POS system, although you could get a mobile card reader if your cashiers move around your location to accept payments. Hardwired systems tend to be more reliable than mobile systems, which require a good network signal.

“Accepting credit card payments at a fixed location begins with selecting the right hardware,” Weiss said. “Businesses will want to make sure the credit terminal supports their needs and is capable of supporting all payment types — tap, swipe, insert.”

Fixed credit card processing equipment

• POS systems: Most POS systems include the hardware and software you need to perform various functions beyond processing credit card transactions, including tracking sales by product, time and promotion. A POS system can also track inventory levels and help you build a customer loyalty program with associated discounts. POS system costs can be significant because they bring so much functionality. “To manage orders and payments, restaurants could find a processor that interact[s] with POS systems very helpful,” advised Korf. “To ensure smooth service, a café, for example, may use a processor that syncs with its ordering system.”
• Stand-alone credit card reader: If you don’t need all the bells and whistles or already have an existing POS system that doesn’t include payment processing, you could opt for a stand-alone credit card reader. Most modern fixed credit card readers accept both swipe and chip (EMV) transactions and some also accept NFC contactless payments.

“Businesses should also consider their use cases,” Weiss said. “Will they need just one terminal or multiple? Are they always going to be stationary or will you need to bring a credit card terminal around your fixed location? Consider the volume of transactions and durability required for in-person, high-traffic use. With in-person transactions, reliability is key.”

How to accept credit cards on a mobile device

Mobile credit card readers are helpful for businesses that travel, sell at trade shows or simply want to accept payments anywhere within their establishment. “Mobile payments are becoming essential as more consumers expect to pay with their phones and wearables,” Weiss said. “For businesses that operate on the go — whether at pop-up events, marketing or client locations — mobile credit card readers and apps provide the flexibility to accept payments anywhere.”

Additionally, some mobile credit card processing apps include basic POS system features that help you manage your sales and inventory, which can be helpful for small businesses that aren’t ready to invest in a full-fledged POS system. “Processors ought to provide features such as a shopping cart integration, a configurable payment page or the ability to send payment links for direct payments,” Korf said. “For instance, an online clothes store may wish to offer links to its consumers for email orders and take credit card payments through its website.”

Mobile credit card processing equipment

To accept credit card payments on your phone or tablet, you’ll need a mobile credit card reader or app. Many readers plug into a mobile device’s headphone jack. More advanced mobile credit card readers connect to your mobile devices via Bluetooth. Mobile card readers can accept swipe-only; swipe plus chip (EMV); or swipe, chip and contactless (NFC) payments.

“Service-based businesses, such as plumbers or food truck operators, can benefit from a mobile card reader or payment software that simplifies payment acceptance,” Korf said. “Mobile credit card processing technology helps businesses to accept payments at the customer’s location, improving ease and professionalism. For example, a mobile hairstylist may utilize a Bluetooth card reader to receive payments right after a haircut.”

A mobile credit card reader doesn’t limit you to accepting payments on your mobile device; these readers can be used as part of a larger system with additional hardware.

How to accept credit card payments online

Accepting credit card payments online requires a payment gateway. Credit card processors often provide payment gateways directly or through a third party. Typically, a credit card processor charges you an additional monthly fee for this service, so you should only set up a payment gateway if you sell online or if your online sales, though infrequent, are large enough to cover the cost.

“Businesses who want to take credit card payments online can use a payment gateway to create a payment page or shopping cart on their website,” said Korf. “They can also provide customers with a direct payment link for quick and easy payments. Businesses can manually enter payment card information when necessary. Simply check [to make sure] everything is secure and PCI-compliant.”

In addition to the monthly fee, some credit card processors charge a gateway setup fee and a per-transaction fee, so review each processor’s terms and conditions before you sign up.

Different ways to accept credit cards online

“There’s no one-size-fits-all approach to accepting credit card payments online — it depends on what works best for your business model and customers,” Weiss said. “Whatever the method, flexibility is critical. Businesses should choose a provider that adapts to their needs and meets their customers’ requirements.”

Depending on the gateway, you’ll have the following options when accepting credit cards online.

Sending your customers a direct payment link

Get the payment link from your payment service provider. Depending on your provider, you may be able to customize the link. Then, determine where to put the link on your website. The customer will then follow these steps:

1. Click the link to open a payment page.
2. Enter the dollar amount.
3. Enter their contact information and billing information.
4. Click a button to complete their order.

Accepting credit cards with a payment page

St. Jude Children’s Research Hospital is a good example of an organization that uses a payments page to accept credit cards. After you create a payments page, your customers would do the following:

1. Choose a payment (or donation, if applicable) amount and frequency.
2. Select a payment method.
3. Enter their credit card information.
4. Enter their billing information.
5. Select Pay (or Donate, if applicable) to finalize their order.

Accepting credit card payments online with a shopping cart

Online shopping carts are payment pages for online retailers. Customers browse e-commerce shops for products and add them to their carts. When they’re ready to check out, they follow these steps:

1. Enter their shipping information.
2. Enter their credit or debit card information.
3. Enter their billing information.
4. Click Pay Now to complete their order.

Processing payments manually

If your business accepts credit cards over the phone — for instance, if you have a restaurant that offers delivery or takeout — and you’ve been writing down credit card information on paper and then entering it into a terminal or POS after you get off the call, you are doing things insecurely.

Instead, use a virtual terminal or payment gateway to accept phone payments or generate and process payments for invoices (if you run a service-based business, such as a law firm or marketing agency). Here’s how:

1. Log in to your payment gateway.
2. Either generate an invoice for your customer or select the Payments tab.
3. Enter the payment and customer information.
4. Click the button to finalize the payment.
5. Choose how you’d like to send a receipt.

With each of these methods, your funds will be processed to go into your account after you’ve batched out and will be posted to your dashboard.

“For smaller businesses or service providers, direct payment links sent via email or text are convenient and quick,” Weiss said. “A larger retail organization on the other hand is more likely to benefit from an online portal, a payments page or shopping cart integration, while a business offering subscriptions would benefit from recurring payments.”

Simplify transactions and boost business: Choosing the right credit card processing solution

Accepting credit card payments is a crucial step for modern businesses to meet customer expectations and streamline transactions. By partnering with the right credit card processor, businesses can access secure, reliable, tailored and flexible payment solutions. From choosing a processor and setting up payment systems to understanding pricing models and reviewing contracts, your business can benefit from a payment method other than cash. By prioritizing convenience and security, businesses can enhance customer satisfaction and drive growth.

Amanda Clark and Jennifer Dublino contributed to this article.