Aside from fees, it's hard to argue against the benefits of accepting credit cards. Electronic payment options are convenient, support multichannel sales, and boost revenue. The flexibility and simplicity of modern payment systems allow businesses of all sizes, from the freelancer with occasional one-off transactions to the e-commerce retailer with high-volume sales, to accept credit card payments from any location or platform.
Once you find the right payment service provider (PSP), setting up your account is straightforward. Learn how to accept credit card payments as a small business and see solutions to jump-start your research.
How to accept credit card payments for a small business
An account with a payment processor is the minimum requirement for an individual or business to receive card payments. You may need to take additional steps or purchase hardware, depending on your situation.
Our comprehensive guide covers the following topics:
- Why small businesses must partner with a PSP or merchant account provider.
- Prerequisites for accepting credit card payments.
- How to take payments online, in person, and over the phone.
- Costs of processing credit card transactions.
- Credit card payment solutions.
[Read more: What You Need to Know About Credit Card Processing]
What every business needs for credit card processing
Electronic payments, including mobile wallets like Apple Pay and credit and debit cards, use sophisticated infrastructure to connect to the customers' bank and credit card networks. The merchant account provider or credit card processor is the go-between that facilitates these transactions.
It isn't feasible for a small business to build and maintain the technologies necessary to accept credit cards, so you must partner with a third-party payment processor like Helcim, Stripe, or ProMerchant. However, payment acceptance tools and functionality vary among providers. Understanding how credit card processing works and how vendors differ can inform your decision-making process.
Understanding how your business processes transactions and the volume can help you compare vendors and find the best rates.
Steps to accepting business credit card payments
Before processing credit cards over the phone or online, you must find a processing provider, establish an account, and set up your services. Many options exist, offering affordable processing fees and various payment terminals.
1. Assess your credit card processing requirements
Credit card processing fees vary between providers and payment methods. Understanding how your business processes transactions and the volume can help you compare vendors and find the best rates.
For instance, two providers may offer nearly identical online processing fees, but one may charge a much higher rate for invoicing. A small business that collects most of its credit card payments through invoices should look for a processor with lower invoice rates, preferably one that integrates with existing software or that has better invoicing tools.
Consider the following questions before beginning your search for a credit card processing provider:
- Where do you process the most transactions (in-person, online, or over the phone)?
- What is the average dollar amount of your transactions?
- Do you want to accept all major credit cards (Visa, Mastercard, Discover, American Express)? What about mobile payments like Google Pay?
- Will your payment service integrate with your existing website, or do you want vendor-provided checkout services?
- Do you have a point of sale (POS) system that you need to integrate with payment terminals or card readers?
- What type of hardware does your business require to process payments?
- Will you implement a surcharge or cash discount program?
- Is your business considered high risk? These industries may include cannabis, telemarketing, and credit repair.
- Do you want mobile payment apps to manage your merchant account services or for payment processing?
- Would you like to accept international payments or local currencies in the near future?
- Do you anticipate having $10,000 or more in monthly credit card sales?
[Read more: How Advances in Digital Payments Help Brands Enhance the Customer Experience and Reduce the Dreaded Wait in Line]
2. Compare payment processors and pricing
First, many credit card processors have similar rates, especially those that charge flat fees. However, even slight differences can affect companies with different pricing models.
Suppose your business has a high transaction volume, but most sales are less than $25. In this case, a vendor offering a slightly higher percentage rate but a lower cents per transaction fee could be the better deal. On the other hand, when your average ticket is over $100, but you have fewer total transactions, the opposite could be true.
A great way to compare credit card processors is to create a mock-up of your sales and calculate your fees for each provider. But as noted above, costs are only one part of the picture. Find information from the processor's website and check out online reviews to get an idea of what to expect. Then, schedule a consultation with the vendor.
Have a list of questions ready so you can get a quote, learn about payment processing times, and understand how their company supports your business and integrates with your site and systems.
3. Choose a credit card processor and open an account
Once you've compared vendors to find the best credit card processing provider for your small business, it's time to apply. Many services offer online applications and quick approval times.
However, you need a business bank account to get paid. Although the funding process differs between processors, ultimately, payments transfer from the customer's account to a merchant account and then to your business bank account.
4. Set up your payment processing systems
To begin accepting credit card payments online, over the phone, or in person, you must configure your account and any hardware. Providers like ProMerchant may offer free, preconfigured EMV and near-field communication terminals. If you go with an all-in-one service like Clover, you will have a more extensive set-up process involving a POS system.
The process is straightforward for small businesses using a smartphone to take payments. It involves downloading the payment app and completing the signup process. Tap to Pay works on Apple devices, and you can add mobile card readers to accept credit cards through a contactless tap, swipe, or inserted chip card.
E-commerce configurations can be more complex, depending on your website, processor, and online payment gateway. Your provider should offer technical support, and your e-commerce software may also have tutorials.
[Read more: 5 Steps to Expand Beyond E-Commerce and Diversify Your Business]
Ways to accept credit cards
Now that you've met the prerequisites for accepting credit card payments at your small business, it's time to process them and get paid. Most customers are familiar with these checkout methods.
A 2023 Federal Reserve study showed that 60% of all payments were made by debit and credit cards (31% credit and 29% debit). Follow these steps to take payments from your customers.
Process in-person payments
To accept card payments in a restaurant, retail store, or food truck, you can use a stand-alone credit card machine or a POS with an integrated payment terminal. For portability, Helcim, Stax, and Merchant One offer hand-held terminals with built-in receipt printers.
The process varies slightly, depending on the hardware and POS features, but cashiers typically follow these steps:
- Calculate the sales total and select the payment method.
- Ask the customer to insert, swipe, or tap their credit card.
- Customers may finalize the transaction by signing a paper receipt or on-screen display.
[Read more: 4 Things to Consider Before Accepting Mobile Credit Card Payments]
Use your mobile device to take payments
For many startups and freelancers, mobile payment processing is the easiest way to accept credit cards. Several vendors, including Helcim and Square, offer free applications known as mobile POS apps. Some also provide card readers that connect to Android and iOS devices through Bluetooth, a headphone jack, or a Lightning connector.
Take payments from customers with your phone with the following steps:
- Open the mobile app, and then enter the buyer's total, or select the products or services from inventory.
- Swipe or insert the customer's card, or ask them to tap to pay if your hardware supports contactless payments.
- If necessary, shoppers can sign the screen to complete the payment and request a receipt through email or text.
Accept a credit card payment online
Although small businesses don't need hardware to take online payments, they require payment gateways, which transmit card data to credit card processors. Most PSPs offer online payment services; some integrate with e-commerce platforms like Wix and Squarespace.
Alternatively, you can select a payment processor that provides website tools for building online stores and checkout pages. Clover and Helcim have solutions for small businesses without an existing e-commerce presence.
Take payments over the phone
When customers want to pay over the phone, you can process transactions through a virtual terminal, mobile app, or onsite hardware. Card-not-present (CNP) payments cost more than in-person transactions but help small businesses collect past-due bills and prepayments for delivery orders.
Accept CNP credit card payments over the phone by completing the following steps:
- Generate a sale through a virtual terminal or POS system.
- Follow the on-screen instructions to request customer information.
- Verify that the information and sales total are correct before submitting.
- Finalize the sale and tell the buyer how they will receive their receipt.
Alternative payment acceptance methods
Secure payment systems come in all shapes and forms, giving merchants the flexibility to receive funds when, how, and where they want.
Review these guides to learn how to process credit cards:
- SMS payments: Send customers a text message to request money. When they click to pay, they land on a payment page where they can complete the transaction.
- QR codes: Create a code for shoppers to scan using a quick response (QR) code generator.
- Recurring payments: Streamline subscription and membership payments with an automated payment processing tool.
Cost of accepting credit card payments
When a business processes credit cards, it pays fees to the card networks (Visa, Mastercard, American Express, and Discover) and the merchant account provider or PSP. The total per transaction can range from 1.5% to over 3.5% plus 10 to 40 cents. The cheapest way to take credit card payments is to use an EMV card reader and manually enter the card details.
Vendors may charge for virtual terminals, payment gateways, and other services in addition to transaction fees. Review the terms of service, understand common terminology before signing any contracts, and look over your monthly statements to catch any hidden charges.
[Read more: 10 Ways to Reduce Your Credit Card Processing Fees]
Credit card payment solutions
While Square, PayPal, and Stripe are well-known flat-rate processing services, small businesses should consider alternatives before settling on a provider. They may offer similar or better rates, support, and hardware with more long-term scalability.
See how the following providers facilitate payment acceptance:
- Stax: Leverage subscription-based pricing and surcharging options to accept every payment method at online and brick-and-mortar storefronts.
- ProMerchant: Add buy now buttons to your website or select fast in-store terminals to take contactless and traditional credit cards.
- Merchant One: Receive payments with mobile devices, hard-wired terminals, or online through reliable small business processing services.
- Clover: Build a complete POS system for your retail store or restaurant with Clover's durable hardware.
- Payment Depot: Use smart terminals or card readers to process purchases at your salon or auto shop.
- Helcim: You can collect credit card payments using Helcim's free POS system, online store, or payment pages, or find an affordable card machine.
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