How to Accept Credit Card Payments in Your Small Business

The pieces that make a card payment work

A card payment passes through your reader or checkout page, a payment processor, the card networks and the customer's bank before reaching your account.

You usually deal with one provider that bundles these pieces. The provider charges fees for the service, and the money lands in your business account after a set delay, often one to two business days. Read everything about merchant accounts for the difference between a traditional merchant account and an aggregated payment service.

Choose a setup based on how you sell

In-person sellers need a reader or terminal. Online sellers need a checkout page or plug-in. Service businesses can send invoices with a pay link.

• Mobile reader. Plugs into a phone or tablet. Good for markets, mobile trades and pop-ups.
• Countertop terminal or POS. Better for restaurants and retail with steady volume.
• Online checkout. Built into a store platform or website.
• Invoice with pay link. Useful for contractors and professionals who bill after the work.
• Virtual terminal. You key in card numbers for phone orders.

Understand how fees are charged

Most providers charge a percentage of each sale plus a small fixed amount. Other fees may include monthly, setup and chargeback fees.

Compare structures, not just headline rates. Flat-rate pricing is simple. Interchange-plus shows the underlying card network cost separately and can be cheaper at higher volume. Ask about:

• Monthly or annual fees
• Early termination fees
• Chargeback fees
• Higher rates for keyed-in or international cards

See debit card processing fees for more detail. Because rates change, confirm current pricing with each provider.

Ask each provider for a sample statement and a quote based on your actual monthly volume and average ticket size. A provider that looks cheap on small sales may cost more on large ones, and the reverse is also true.

Set up in five steps

Choose a provider, apply with your business details, connect your bank account, set up your hardware or checkout and run a test sale.

1. Compare two or three providers on fees, deposit speed and hardware.
2. Apply with your EIN or Social Security number, business address and bank details.
3. Link your business bank account.
4. Install the reader or add checkout to your site.
5. Run a small real transaction, then refund it.

Use a dedicated business account so deposits and fees are easy to reconcile. See separate business and personal finances.

Protect yourself from fraud and chargebacks

Chargebacks reverse a sale when a customer disputes it. Clear receipts, descriptive billing names and good records help you win disputes.

Keep signed work orders, delivery proof and customer messages. Use a billing descriptor customers will recognize. Follow your provider's security rules, and never store card numbers yourself. Use chip readers and, online, secure hosted checkout pages.

How card sales affect cash flow

Deposits arrive after a short delay, and fees reduce each payment. Plan for both when you forecast cash.

If you sell $20,000 a month by card at 3%, fees run about $600. That is an illustrative figure, but it shows why the cost belongs in your pricing. Delays between sale and deposit can create small gaps. Learn to plan around them with cash flow analysis.

Card volume and business funding

Card sales show up in bank statements, which many funders use to judge revenue. Steady deposits strengthen a funding file.

Some funding is based on your sales volume. ROI Funder considers 500+ FICO, 6+ months in business and $20,000+ monthly revenue, and reviews three months of bank statements. Options include working capital and revenue-based financing, where repayment rises and falls with sales. Apply with a soft credit pull.