Businesses can accept credit card payments online for free, but there is no escaping transaction fees. That’s because banks and credit card companies charge a fee whenever a card is used as payment. However, there are plenty of ways to accept payments online with affordable credit card processing fees around 3% to 4%.
Square is one of the easiest and most affordable solutions to accept payments online. Square is free to set up and offers low-cost payment processing with no additional fees or monthly minimums. With Square Payments, you simple pay transaction fees as payments are processed—that’s it. Square also offers a whole suite of tools for creating a website and managing your business, so everything is organized under one sleek system. Visit Square to create your free account.
How Online Payments Work
To accept credit cards online, you need a tool to collect customer data and a way to process the payments. There are many different ways to accept payments, including:
- Invoice payments: Invoice payments are typically used by freelancers or service providers to send customers a bill for a specific product or service.
- One-touch payments: Solutions like PayPal allow customers to pay for products or services without having to enter their credit card number, and can be used for product sales, service charges, and nonprofit donations.
- Recurring payments and subscriptions: Tools like Stripe can be integrated into businesses’ websites or apps to set up recurring payments for subscriptions.
- Online shopping carts or ecommerce platforms: This is the most common form of online payment and is used by ecommerce sellers to collect payments for online orders.
The best way depends on your individual business. If you are a sole proprietor who doesn’t sell retail but wants an easy way of charging clients, a simple invoicing tool is a good choice. If you’re a small business that wants to do some online sales, a simple shopping cart integration can easily be added to your website. If you’re looking to establish an ecommerce business, an ecommerce website with built-in checkout is a good option.
Costs of Accepting Payments Online
Unfortunately, there’s no way to accept credit card payments online for free. The exact costs will vary depending on the type of payments you are accepting and the provider you choose. But, if you choose a provider with no monthly fees, you can expect to pay around 3% in transaction fees. If you’re a brick-and-mortar business, it’s important to note that online processing fees are usually higher than fees to accept credit cards in-store.
For example, Square charges the following fees:
- Website or in-app payments: 2.9% plus 30 cents per transaction
- Ecommerce payments: 2.9% plus 30 cents per transaction
- Invoice payments: 2.9% plus 30 cents per transaction
There’s no way to accept credit cards online for free because credit card issuers like Visa and Mastercard charge a non-negotiable processing fee every time the card is used. This fee is called an interchange fee. Your merchant account provider or payment processor pays this fee, then passes it along to you with their markup, which can take the form of a transaction fee or a monthly fee.
Online Payment Processing Providers
There are several payment processing solutions that are free to set up and use. While you can’t accept payments online for free, you can accept credit cards online for a low cost. The below providers just charge a flat-rate transaction fee and are easy to implement.
Square: Best for Businesses That Need a Website
Square is a cloud-based payment processing, point-of-sale (POS), and business management suite for in-store, mobile, and online businesses. Square credit card processing can be added to most online checkouts and ecommerce platforms. Square also offers solutions to build a basic website for free or a more sophisticated site at competitive prices.
Square’s fees include:
- Monthly fee: $0
- Setup fee: $0
- Online payments: 2.9% plus 30 cents per transaction
- Invoice payments: 2.9% plus 30 cents per transaction
Square’s online payment processing features include:
- Accept all major credit and debit cards
- Integrate with most major ecommerce platforms and web building platforms
- Build a custom website through Square for free
- Create a custom checkout with Square APIs
- Send and receive professional invoices for free
Square is free to set up and use, including to build a basic website with built-in checkout. Businesses just pay the transaction fee. Create a free Square account to get started.
PayPal: Best for Adding to an Existing Website
PayPal is primarily an ecommerce and invoicing tool, even though they have very affordable in-store and mobile payments. With PayPal, you can install a simple online checkout for free on most websites and ecommerce platforms; it accepts debit cards, credit cards, PayPal, and even Venmo payments. PayPal’s One-Touch checkout is available with PayPal’s free standard online checkout.
PayPal’s fees include:
- Monthly fee: $0
- Setup fee: $0
- Online payments: 2.9% plus 30 cents per transaction
- Invoice payments: 2.9% plus 30 cents per transaction
PayPal’s online payment processing features include:
- Free online checkout tool
- Competitive processing rates
- All major credit cards, debit cards, PayPal, PayPal Credit, and Venmo payments accepted
- One-Touch checkout for shoppers on mobile devices
- Free invoice tool
PayPal One-Touch checkout buttons
Create a free PayPal account to send invoices, and add PayPal checkout to your website. Visit PayPal to get started.
Stripe: Best for Subscription Businesses
Stripe is a payment processing system that creates custom online checkouts. Stripe is unique because it is designed to handle subscriptions, recurring fees, and storing card data in addition to traditional ecommerce. Stripe is best for businesses that need to develop a sophisticated checkout solution for free.
Stripe fees include:
- Monthly fee: $0
- Setup fee: $0
- Online payments: 2.9% plus 30 cents per transaction
- Stripe billing (recurring payments): Free for first $1 million; 0.4% per transaction after $1 million
Stripe’s online payment processing features include:
- All major credit and debit cards, AliPay, ACH, Apple Wallet, and Google Wallet payments accepted
- Professional invoicing tool
- Ability to store and save payment methods
- Embeddable checkout
With Stripe, you can embed a checkout onto any website
Stripe is a low-cost option for businesses that need recurring online payment solutions. Stripe checkout is free to use and embed on any website, businesses just pay transaction fees. Visit Stripe to get started.
Due: Best for Low-cost Invoicing
Due is an invoicing tool for freelancers and very small businesses. In addition to free invoicing tools and flat-rate payment processing, Due has a free time-tracking tool that makes it a good choice for freelancers and businesses that bill by the hour or project. Due is for invoicing and billing, not ecommerce. So, it’s not a good fit for trying to integrate with an online shopping cart. But if you operate a business that charges per project, Due is a great fit.
Due fees include:
- Monthly fee: $0
- Setup fee: $0
- Invoice payments: 2.8% per transaction
Due payment processing features include:
- All major credit and debit cards, PayPal payments, and multiple currencies accepted
- Unlimited mobile-friendly invoices
- Ability to set due dates and reminders for payments and projects
- Free time tracking tool for projects
Sample Due dashboard
Due is one of the most affordable ways to accept payments online for small and freelance businesses that bill by project. Due is completely free to use—just pay a transaction fee. Visit Due to get started with a free account.
Cash App: Best for Individual & Peer-to-Peer Payments
Cash App is a free peer-to-peer app and website for exchanging payments between individuals. The app allows users to send and request money from other Cash App users for free. Each user has a unique username called a $cashtag and a link they can use to direct people to their Cash App account to submit payments. Cash App is strictly for individuals, not businesses, so it’s a good fit if you are looking for a free way to settle payments between friends or family.
Cash App fees include:
- Monthly and setup fee: $0
- Fee to send money from a bank account: $0
- Fee to send money from a credit card: 3%
- Fee to receive and deposit money: $0
- Fee for instant withdrawals: 1%
For users receiving payments, Cash App is completely free. You can receive money and deposit it into your bank account at no charge. Standard deposits can take a few business days, or you can transfer funds to your bank instantly for a 1% fee. For users sending money, it’s free if you send from a bank account or debit card. Otherwise, there is a 3% fee to make payments with a credit card. Visit Cash App to create a free account.
How to Start Accepting Payments Online
If you are a retail or service provider wanting to accept payments online, you will need a website. The exact kind of website you need will depend on what your business is and what types of payments you are collecting. For most retail businesses, you will want an ecommerce platform to accept payments. Service providers and other businesses may be better suited with a traditional website that has an invoicing or shopping cart function.
After choosing the type of website you want, you’ll need a domain name or URL address. It’s important to do this step right away because thousands of domains are registered each day and you don’t want to miss out on getting the name you want. Bluehost lets you purchase and register a domain, and hosts your website for just $2.95 per month. Visit Bluehost to register your domain right away.
Build a Low-cost Website
Once you secure your domain name, the next step is actually building your website. If you already have a website, check with your web hosting provider or web builder to see what free or low-cost payment processing integrations are available. For example, WordPress has several plugins for selling online and accepting payments, including WooCommerce, which is free.
If you don’t already have a website, Square offers a free website with ecommerce features, like a shopping cart, unlimited products, inventory management, and of course, the ability to accept credit cards, debit cards, and gift cards with Square Payments. In addition to the free version, Square also has paid website plans that include features like product reviews, shipping calculators, and social media integrations.
Choose a Payment Processing Solution
In order to accept credit cards, you need a payment processing or merchant services account. Choosing a solution that has its own payment processing solution, like Square, is often the easiest choice because you can manage your business, website, and payments all in one place. But also consider that not all payment processing rates are equal. Shop around to see which merchant services is best for your business.
When choosing a payment processing solution, be sure to consider the following:
- Transaction fees: Choose a solution with flat-rate fees or interchange-plus credit card fees.
- Monthly fees: Some solutions offer low transaction rates but have high monthly fees.
- Startup fees and applications: Traditional merchant services accounts typically have longer setup processes than third-party credit card processing solutions.
- Contracts and requirements: Some solutions require you to sign up for a year or more; others require your business to meet monthly transaction minimums.
- Compatibility with your website: Make sure the service you choose integrates well with your website hosting service.
Connect Your Payment Processor to Your Website
Now that you have a website, tie it all together by integrating your payment processing solution. If you use an all-in-one solution like Square, the process is easy because payment processing is a built-in part of Square’s website and ecommerce solutions. However, if you’re adding a payment solution to your existing website, there are many plugin options available on hosting solutions like WordPress. If you’re not using an all-in-one solution, a plugin is the next best option because it is also easy to set up.
Tips for Low-cost Online Payment Processing
If you’re a retail business owner or service provider, payment processing fees can quickly become a large business expense. However, there are many steps you can take to minimize processing fees.
Choose the Right Payment Processor to Save Money
When choosing a payment processing solution, it’s important to do the math yourself and compare rates. The credit card processing business is notoriously opaque, and not all companies have the same kind of fee structure. When comparing rates, ask processing companies for sample statements.
Use the Same Processor for All Sales Channels
If you sell online and in-person, ideally you will want to use the same payment processor for everything. You’ll keep all of your sales records in one place, minimize any extra costs from setup fees, and only have to coordinate with one service provider.
Add Multiple Payment Methods to Your Ecommerce Store
Incorporating multiple payment methods can be an effective way of increasing your online store’s checkout or conversion rate. For example, if you are an online seller using a shopping cart or ecommerce site, adding a one-touch checkout button like PayPal can make the checkout process easier. Offering instant customer financing options at checkout can also help increase conversions.
Online Payments Frequently Asked Questions (FAQs)
Don’t see the answer to your question on how to accept credit card payments online for free? Visit our Fit Small Business community forum to ask an expert.
Can I accept credit card payments online free?
If you are looking to accept personal payments from friends or family members, you can exchange money for free using apps like Venmo and Cash App. But if you are a business looking to sell products or accept payments for services, there are no free merchant accounts or payment processing solutions. However, you can find affordable solutions that only charge a small transaction fee.
What is the cheapest online payment processor?
The cheapest online payment processor varies for each business based on the size of your business, how many transactions you process, and your average transaction amount. Visit our guide on the cheapest credit card processing solutions to see which one may be right for you.
How can I accept online invoice payments?
There are many affordable and easy-to-use software solutions for accepting online invoice payments. For example, Square has an invoice solution that integrates with its other website, ecommerce, and payment processing solutions. Visit our Square invoice guide to learn how to set up and send an invoice.
What are the differences between online & in-person payments?
Generally speaking, online payments are more expensive to process than in-person payments. Processing companies typically charge higher transaction fees because online payments are considered riskier than in-person transactions since the credit or debit card is not present.
Do I need an ecommerce platform?
Whether you need an ecommerce platform depends on the type of business you have. If you are looking to sell products, and use online sales as a way to grow your business, then you should opt for an ecommerce platform such as Square or Shopify. However, if you are looking to use your website simply as a means for collecting payments, a traditional website will work just fine.
Bottom Line
Although there is no way to accept credit card payments online for free, it’s very possible to find an affordable solution to build your website and set up payment processing. You can minimize costs and streamline the entire process by choosing an all-in-one solution that will host your website and offer competitive payment processing.
Square is one of the most affordable and easiest-to-use solutions that offers everything you need to accept payments online, including a free payment processing account and a free website. Plus, with Square, you can add extra features as you grow and use Square’s marketing solutions to help scale your business. Visit Square to create your free account.
Submit Your Comment
Disclaimer: Reviews on FitSmallBusiness.com are the product of independent research by our writers, researchers, and editorial team. User reviews and comments are contributions from independent users not affiliated with FitSmallBusiness.com's editorial team. Banks, issuers, credit card companies, and other product & service providers are not responsible for any content posted on FitSmallBusiness.com. As such, they do not endorse or guarantee any posted comments or reviews.
You must be logged in to comment. Click a "Log in" button below to connect instantly and comment.