This article is part of a larger series on Payments.
The best way to accept credit cards will depend on your business needs and the type of business you have. For example:
- Brick-and-mortar shops should purchase and set up a point-of-sale (POS) system
- Mobile businesses will want to use a mobile payment processor with a card reader or one that uses tap-to-pay
- Online-only businesses need an online payment processor (or payment service provider/merchant account services provider)—with strong security as online payments pose a higher risk of fraud
Let’s take a closer look at these three ways of accepting credit card payments and our recommendations for the best payment processors. But first, you can take our quiz below to get matched with a buyer’s guide to the best payment solutions for your business.
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How to Accept Credit Card Payments In-store
If your small business has a fixed physical location, you will need a countertop setup (the kind you see at checkout lanes) to accept credit card payments. This will include a point-of-sale (POS) system with a built-in card reader or attached card payment terminal where customers can present their credit cards to swipe, tap, or dip to process the payment. The checkout counter may accommodate alternative payment methods like contactless and digital wallets.
Did You Know?
Transaction fees for accepting in-person payment are the cheapest because presenting the customer’s credit card poses the least risk.
To start accepting payments in-store, you will need to sign up with a POS provider, purchase the necessary hardware, set up your POS system, and then test it. We break down these steps in more detail below.
The first thing you need to do is to sign up with a POS provider, which will provide you with the software and hardware necessary to process credit card payments. Most POS systems already come with a built-in payment processing service or partners with one. Choose a provider that offers competitive pricing, excellent customer service, and a user-friendly interface. Read our in-depth reviews for some popular options like Square for Retail and Lightspeed Retail.
If affordability is a significant factor in your choice of POS provider, there are some free POS software that you can use—you only need to purchase the hardware.
Once you have chosen a POS provider, you will need to purchase the necessary hardware, which may include a card reader, a tablet or computer to run the POS software, and any additional peripherals you may need, such as a cash drawer or receipt printer. The hardware will depend on your business type and the volume of transactions you expect to process.
A countertop card reader can either be built into the POS hardware or needs to be connected to the device where your POS system is installed. This can be a desktop computer, a tablet, or a mobile device. In contrast, a standalone POS terminal is mobile and self-contained, often used by businesses requiring flexibility, such as food trucks or pop-up shops, as they feature an integrated touchscreen, card reader, and, occasionally, a receipt printer, allowing transactions to occur anywhere.
Take a look at some of the hardware options available for a few popular POS providers.
For more options, read our review of the best credit card readers for small businesses.
Following the instructions from your POS provider, make sure that your system is set up correctly. The initial step is installing the POS software on the device you will use as your point of sale. Most POS providers offer software that is relatively easy to install, and a lot of proprietary hardware comes with the software already installed.
If your POS setup includes a primary POS device and several readers, you might need to connect all the hardware via Bluetooth. You must also configure your account and settings with your business information, payment types, pricing, and tax settings.
You’ll also want to customize your POS system to meet your specific business needs. This step may involve adding product listings, creating categories, and setting up discounts and promotions.
If you signed up with Square, use our tutorial on how to set up Square POS.
After setting up your hardware and software and configuring the settings, test your POS system thoroughly to make sure that everything works. This procedure may involve running several test transactions, checking inventory levels automatically syncs after every transaction from all your payment terminals, and ensuring that your receipts are being generated correctly.
Some POS systems have a sandbox or a test environment that allows the simulation of various actions you will perform on your POS, such as taking payments, creating an inventory, simulating different kinds of transactions, and printing receipts.
How to Accept Credit Cards Using a Mobile Phone
If you want to accept payments outside of a physical storefront location, you need mobile payment tools. You can accept mobile payments via Bluetooth-enabled card readers that sync with a smartphone or a mobile POS device like a Square Terminal.
Mobile terminals are popular for small businesses selling at farmers markets and restaurants processing tableside or curbside orders and payments.
To start accepting credit card payments using a mobile phone, you will need to sign up with a mobile payment processor, purchase the necessary hardware or a tap-to-pay compatible mobile phone, set up your mobile payment tools, and test it. We go into the details of each step below.
Look for a mobile payment processor that offers the features and pricing that meet your business needs. For better flexibility, look for providers that offer mobile card readers, mobile POS devices, and other mobile payment tools. There are paid services that offer mobile payment processing, but there are free ones as well.
Read our guide on the best mobile credit card processors to find the right one for your business.
To accept credit card payments using your mobile phone, you will need either a card reader to connect to your phone or a tap-to-pay feature.
Using a Card Reader
Mobile credit card processors have card readers that can connect to your phone to pass the card information to your mobile POS app. These could be as small as a dongle that syncs to your smartphone or as elaborate as an entire POS system.
Some readers, like Square’s free magstripe reader, connect to your phone’s audio jack and allow you to swipe cards for payment. NFC card readers like the Clover Go card reader, connect to your phone via Bluetooth, allowing you to tap, dip, or swipe cards to process payments.
Using tap to pay
Some mobile payment processors allow you to use an NFC-capable phone and turn it into an NFC card reader by offering a “tap to pay” feature. This feature allows you to accept credit card payments without buying additional hardware.
Some providers that offer a tap-to-pay feature are PayPal Zettle, Square, Clover, and Shopify POS. Most processors with tap-to-pay features only have it available on iPhones; Stripe and Square are among the few providers offering tap-to-pay on Android. Check that the tap-to-pay feature is compatible with your mobile phone.
Read our guide to tap to pay to know more about what it is and how it works.
Different mobile payment processors will have different steps in setting up your mobile payment tools. The first step will typically involve downloading and installing a mobile app provided by your payment processor, which will serve as your mobile POS system.
Once the app is installed, you’ll need to connect your hardware, such as a mobile card reader, to your mobile phone via Bluetooth or another connection. Your payment processor will provide you with instructions on how to connect your hardware.
If you prefer not to purchase additional hardware and use the tap-to-pay feature, it often only requires enabling it in your mobile app. Check with your provider for specific instructions on how to activate this feature. Also, keep in mind that the transaction rates of providers may differ depending on the payment method. Find out the processing fees for using tap to pay on your mobile to accept payments.
Configure your app based on your preferences and business needs. Enter any necessary business information, such as your business name, address, tax identification number, and payment details for your payouts. If your mobile app allows you to create your own product catalog, set it up and enter your product details.
Conduct a thorough test of your system to ensure that everything is working as it should. This step may involve running several test transactions, checking inventory levels, and ensuring your receipts are correctly generated.
How to Accept Credit Cards Online
There are several ways to accept credit cards online:
- Through an ecommerce platform or online shop
- By using a virtual terminal to enter your customer’s payment details
- By sending an invoice for one-time or recurring payments
To accept online payments, you will need to sign up with a payment processor that operates online, a payment service provider (PSP), or a merchant account services provider. However, you’ll want to remember that online payments are more prone to fraud.
According to a recent study, online payment fraud costs are expected to exceed $343 billion between 2023 and 2027. Physical goods account for nearly 50% of all fraudulent online payments. So, small retailers that sell physical goods online should be sure they have excellent fraud protection in place and learn how to prevent chargebacks.
No matter how you want to accept credit cards online, you will need to sign up with an online payment processor. We go into more detail in our comprehensive guide on How to Accept Credit Card Payments Online.
Best All-around Payment Processors
New and small businesses
2.6% + 10 cents
2.9% + 30 cents
Membership-style pricing; high-risk businesses
Interchange + 8 cents
Interchange + 18 cents
Established, low-risk businesses
Interchange + 0.30% + 8 cents
Interchange + 0.5% + 25 cents
2.7% + 5 cents
2.9 + 30 cents
High-volume businesses; subscriptions
Interchange + 8 cents
Interchange + 18 cents
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)
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 can be confusing and often used interchangeably. Even though payment service providers are not technically merchant accounts, they do provide merchant services.
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.
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.
You can typically accept online credit card payments with no upfront cost via a payment services 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.
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).
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.
The ability to accept credit cards is a must for every business, whether you need to accept payments in person, online, or with the use of a mobile phone. 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.