How to Accept Credit Card Payments in 6 Steps
Meaghan has provided content and guidance for indie retailers as the editor for a number of retail publications and a speaker at trade shows. She is Fit Small Business’s authority on retail and ecommerce.
With more than a decade of hospitality experience, Mary has worked in some of the most celebrated restaurants in the world. Her expertise is featured across Fit Small Business in restaurant, retail, and starting a business content.
This article is part of a larger series on Payments.
To determine the best way to accept credit card payments for your business, you need to account for your payment processing needs—this will help you decide if you need to use a merchant account, a payment service provider (PSP), or an app. Then, it’s a matter of opening a credit card processing account with your chosen provider and setting up and testing your system. We break down the process into six simple steps below.
Step 1: Determine Your Payment Processing Needs
Determine if your business needs to accept credit card payments in-store, online, through mobile, or in the field, and whether you charge one-time, recurring, or subscription payments. Figuring out your credit card processing needs ahead of time helps you narrow down choices and prioritize features.
For example, an online store with dropshipping needs a different system than a small boutique in the tourist district. Click to expand the following section for more considerations.
Questions to Help You Determine Your Payment Processing Needs
- How much will you process in a month? If you process over $10,000 a month regularly, then an interchange-plus provider may be more cost-effective. But, if you process credit cards infrequently, an option with no monthly fees or minimum sales obligations would suit your needs better.
- Will you process most of your credit card payments in-store or online? While many credit card processors can handle both, most focus on one area. Some processors charge additional monthly fees to access certain features like online payments or invoicing.
- Will you take payments at the table, curbside, or off-site locations? Credit card processors with mobile processing apps and tools are best for taking payments on the go.
- Do you have subscription-based products or services or recurring billing? Some services offer special rates for invoicing, while others have tools for recurring payments. Some process ACH transfers (which are cheaper for invoicing) and incorporate payments straight into your accounting software.
- How worried are you about chargebacks? While all merchant services provide some fraud protection, some waive chargeback fees or offer additional chargeback services.
- Do you need POS hardware? Most services charge extra for POS systems. Others offer hardware free with certain conditions (like higher processing rates).
- Do you process international sales? Not every merchant service works in every country. However, some handle 100+ currencies.
- Do your customers want financing? Some customers may want financing options such as buy now, pay later (BNPL) or installments.
- Do you need other services? Some merchant accounts offer services like inventory management, business funding, or money management.
Step 2: Select a Payment Processor
If you run a business that requires other software—like a point-of-sale (POS) system, ecommerce platform, and appointment booking—you’ll want to use a payment processor that is compatible. Streamlining your payments with other checkout and management tools reduces manual entry and human error and makes your system easier to troubleshoot. Many POS systems come with a built-in processor, so you may already have this step done for you.
We discuss the pros and cons of each option for accepting credit card payments below:
What is a merchant account?
A merchant account is a bank account where digital credit, debit, and mobile wallet providers send payments from their customers to your business
How do I get one?
You need to contact a merchant services provider and submit an application.
Examples: Chase, Helcim, PaymentCloud, Stax Pay by Fattmerchant
Typical processing rates: Interchange + 15–30 cents (Rates vary based on provider and your business type)
Who it’s best for: Established, high-earning, or high-risk businesses
| PROS | CONS |
|---|---|
| Processing rates tend to be lower, interchange-plus rates | Requires an application and lead time to enroll |
| Merchant services providers offer excellent customer service | Rates vary based on credit history and sales volume |
| Accounts are supported by detailed reporting that assists with taxes and other business needs | New, unproven businesses tend to pay higher rates |
| Established brands have been operating for decades | May be more elaborate than micro-businesses need |
For more information, download our free step-by-step guide to applying for a merchant account (including tips for getting the best rates).
Quiz: Which Payment Processor Is Right for You?
Need help deciding the best fit? We’ve provided a quick four-question quiz that looks at the most important payment processing concerns and shows you which provider might best suit your situation. (You won’t be redirected to another page.)
Answer a few questions about your business, and we'll give you a personalized product match.
Step 3: Open a Credit Card Processing Account
If the credit card processing service you’ve chosen is a payment service provider, you may only need to sign up on its website with your contact and banking information. However, if you are a high-volume business wanting interchange-plus pricing, or a high-risk business needing a more specialized processor, then you need a merchant account, which requires a few more steps.
To get a merchant account, you generally go through a bank, though many point-of-sale (POS) brands provide a built-in merchant account. In either case, you’ll need to prove you’re a legitimate business. Each merchant account provider has its own paperwork requirements, which generally include:
- Business bank account details
- Financial statements
- Business license
- A physical business address
- Employer identification number
- Articles of incorporation
- PCI compliance
- Other supporting documents such as business plans, marketing materials, and more
With the documents in place, you’ll be ready to shop around for accounts that best serve your business. These five processors have strong all-around features that support online and in-person sales. They are a good place to start looking at processing rates and options for all types of small businesses.
Best All-around Payment Processors
Best for | Monthly fees | Card-present rates | Online rates | Chargeback fees | |
|---|---|---|---|---|---|
 | New and small businesses | $0 | 2.6% + 10 cents | 2.9% + 30 cents | $0 |
 | Membership-style pricing; high-risk businesses | $59+ | Interchange + 8 cents | Interchange + 15 cents | $0 |
 | Established, low-risk businesses | $0 | Interchange + 0.30% + 8 cents | Interchange + 0.5% + 25 cents | $0–$15 |
 | Online businesses | $0 | 2.7% + 5 cents | 2.9 + 30 cents | $15 |
 | High-volume businesses; subscriptions | $99 | Interchange + 8 cents | Interchange + 15 cents | $25 |
Step 4: Set Up Your Payment Software
With your processor selected and an active account, you’ll next need to get familiar with the software. This step depends on whether you are integrating your credit card payment processor into a POS system or website you already have or using tools provided by the merchant or card processor service.
If you are accepting online payments via your website, there will typically be a plugin to install in your website dashboard. Once installed, the plugin will guide you through the necessary steps to input the required information.
Integrating Stripe payments into your WordPress site requires entering “keys” that are unique to your Stripe account.
If you plan to use software for POS, invoicing, or virtual terminals that your payment processor provides, you’ll need to follow the setup directions. Typically, it involves inputting unique “keys” of alphanumeric codes unique to your merchant account somewhere into your payment processing software.
Merchant services like Chase or Payment Depot integrate with popular POS systems, even those that may provide payment processing themselves. In these cases, you’ll enter your processor’s information in your POS system’s back office dashboard.
Step 5: Set Up Your Hardware
If you are accepting in-person payments in-store or off-site, you’ll need card readers. These could be as small as a dongle that syncs to your smartphone or as elaborate as an entire POS system. This step depends entirely on which type of system you purchase, but many work in a similar way. We’ll use Square’s POS hardware as an example.
For small NFC card readers, you’ll only need to connect the reader to your smartphone via Bluetooth and open its app, and then use the POS app to start processing payments. If you are using a swipe or dip card reader, it may connect to your phone or tablet via an audio jack or lightning connection.
Small card readers, like Square’s contactless reader, just need to be paired to your smartphone via Bluetooth. (Source: Square)
To set up the Square Terminal (and most other standard card terminals), you’ll need to turn it on, connect it to your internet via Wi-Fi or ethernet cable, and then load your receipt paper.
If you’re using a traditional card terminal or a handheld touch-screen terminal like Square’s, you’ll need to connect the device to a power source and internet. (Source: Square)
From there, you’ll need to sign into your account (either on the terminal itself or in the back office dashboard).
Learn more about payment processing hardware with our guides on
Step 6: Test Your System
It’s important to test the payment process to make sure it provides an easy experience for the customer and handles the transaction properly. You’ll also want to be sure that the information, like the card name and number, is transmitted correctly, that the system will reject an expired card or a wrong CVV number, and that it sends an alert if so.
In the case of Square (and many others), there isn’t a training mode or live preview you can use to see if your system is running correctly. With other more traditional terminals and POS systems, you can usually check that the connections are all functioning within the terminal settings.
In these cases, you can process a small transaction, such as $1, and refund the amount after the test is completed. Just be aware that you may not be able to recover transaction fees with some providers.
Online payment processors, such as Shopify, are usually easier to test because they specifically offer test modes, have a “bogus gateway,” or offer preset “dummy cards” to test their system.
Shopify offers a test mode, which you can find in the settings. When enabled, you cannot process actual payments. (Source: Shopify Support)
Accepting Mobile, Online & Invoice Credit Card Payments
Your payment processing provider can help you accept payments in many different ways. You can process credit card and other digital payments online, off-site, or via digital invoices. The support you need to accept payments beyond the traditional in-person card swipe will vary.
Small Business Credit Card Processing Fees
The actual processing fees you pay will depend on your business type, sales volume, and the types of cards you accept. So, there is no one-size-fits-all fee. But, if you budget from 1% to 4% for processing fees, you’ll rarely be surprised.
You can get a deeper understanding of the different types of fees by checking out our guide to credit card processing fees.
How to Accept Credit Cards Frequently Asked Questions (FAQs)
How do I accept credit card payments?
You can accept credit card payments via a merchant account, a payment service provider, or—sometimes—even a payment app. How you accept credit card payments will vary depending on your business type, sales volume, and the location where most of your sales take place.
Learn more:
Do I need a merchant services account to accept credit card payments?
You do not need a merchant services account to accept credit card payments. If you want to start accepting credit card payments right away, payment service providers tend to have the shortest turnaround time. All you need to do is sign up on their website and connect an active bank account.
Tip: The terminology around payment processors is confusing and often used interchangeably. Even though payment service providers are not technically merchant accounts, they do provide merchant services. For example, we include both in our guide to the best merchant services for small businesses.
Can I use my existing gift cards with a new merchant services provider?
Typically, gift cards are supported via an integration with your POS or merchant account. Even if you originally added gift cards via your merchant account provider (or POS with built-in processing), there is a chance the actual gift cards are subcontracted through a third-party vendor. You’ll need to inquire with your current processor to find out exactly what network your gift cards operate on. Popular gift card providers include Customer Connect, and National Gift Cards.
Most payment gateways—such as First Data and Worldpay—have their own internal gift card processing solution. So, whether or not you can use your current gift cards when you switch processors will depend entirely on what network your new processor and old processor used. If they operate on the same network, then you can likely keep your current gift cards.
Can I accept credit card payments online for free?
You can typically accept online credit card payments with no upfront cost via a payment service provider like Square or Stripe. The provider will retain their processing fees from the transaction and send the remaining funds to your business bank account.
What is the cheapest way to accept credit card payments?
The cheapest way for your business to accept credit card payments will depend on your business type. For example, if you process less than $10,000 a month, then flat-rate processors with no monthly fees that give you free POS software, like Square, may prove the most cost-effective.
If you process over $10,000 a month, then look for interchange-plus pricing. Merchant banks like Visa charge a percentage for accepting credit cards, which can vary by type of credit card (Visa Rewards vs Visa Rewards Signature, for example). Flat-rate processors include this in what they charge you.
Meanwhile, interchange-rate processors charge only the specific rate plus a small per-transaction markup. This makes a big difference when you have larger transactions. In our table, Payment Depot, Helcim, and Stax provide this pricing. See our guide on the cheapest credit card processing companies and how to accept credit cards online for free for more details.
Another way to keep credit card processing fees down is to limit chargebacks due to fraud or errors. Learn more in our article on how to prevent chargebacks.
What is the best way to accept credit card payments?
The best way to accept credit card payments will vary depending on your business needs. If you process mostly in-person payments, you’ll want a traditional merchant account provider with user-friendly card readers that accept a wide range of payments. Subscription-based businesses are also best served by traditional, all-in-one merchant account providers like Helcim.
If most of your sales are online, however, you could use a traditional merchant account provider or a payment service provider that specializes in online payments.
For service-based businesses that operate in the field, like landscapers, repair people, mobile beauty service providers, or farmers market vendors, a payment app or a payment service provider are the best choices.
Explore industry-specific payment processors to learn more.
- Best retail payment processors
- Best credit card processors for restaurants
- Best B2B payment solutions
- Best high-risk merchant account providers
- Best payment processors for nonprofits
- Best processors for recurring payments
Bottom Line
The ability to accept credit cards is a must for every business, whether you need to accept payments in-person, online, or over a virtual terminal. Getting set up to accept credit cards can be easy. The hard part is knowing you are getting a good rate and signing up with a company that offers the support you can rely on.
If you’re a new business, Square offers an affordable and immediate way to accept credit card payments in-person through Square’s POS app, online through Square Online’s free store, or through Square Invoices. Square’s flat-rate fees are transparent and offer good value for new businesses or occasional sellers. Create a free account today.
You May Also Like:
- Learn about the best cash registers and how to detect counterfeit money
- Stay up-to-date on small business payment trends
- Read about QR code payments
