How To Accept Credit Card Payments As a Small Business

ByJulija A.
September 22, 2021

If you are looking to improve your business, you might have already googled how to accept credit card payments, only to find a bunch of options you’d have to Google further. Luckily, we’re here to help.

Your main goal should be to accommodate your customers and save them the hassle of unnecessary ATM trips, which will in turn make them more likely to spend their money on your goods. It would help your business tremendously if you offered multiple payment options to go with the excellent products you’re selling.

In this guide, we’ll go over the why and the how of accepting credit cards, so by the end, you’ll be fully prepared to decide on one of the possibilities.

Why Should I Accept Credit Cards?

There are plenty of reasons, but the most important one is convenience - both for you and your customers.

Nowadays, cash is no longer the way of the world - it’s impractical, a call to theft, and you can always be short on it. In fact, people in San Francisco used cash for only 26% of all their transactions in 2018. This percentage is getting smaller and smaller, and with credit-card-use trends locked in a growing pattern. In other words, it’s a matter of time before you’ll be obligated to start accepting credit cards.If we look at it from a sales point of view, research shows that people tend to spend 83% more on average when shopping with a credit card, as cards accommodate impulse shopping better - seeing the amount of cash in your physical wallet limits your spending, while with a credit card, it’s all just numbers. After all, carrying cash instead of using digital payment methods is the no. 1 advice people get for cutting down on excessive shopping.

Any business that isn’t accepting credit cards is not only limiting how much customers can buy, it’s also just plain losing customers. Yes, some of them will go find an ATM and come back to the shop, and you probably have a couple of regulars that don’t mind either way, but that doesn’t work for everyone. Does everyone who goes to the ATM actually come back? Not accepting credit cards is a lot of money left on the table, and leaves plenty of room for improvement.

Convinced yet? Let’s see how you can help yourself.

How Can I Accept Credit Cards?

Setting up digital payment methods might seem like a hassle, but it’s a lot less complicated than most people think. It just takes a little bit of research, as there are several options out there, and you have to cherry-pick between credit card processing companies. The most intimidating aspect is the math - you need to have a detailed account of your earnings and expenses to figure out which fees and rates your current balance can handle.

How Do I Choose a Provider and Set Up Credit Card Payment?

Choosing a credit card processor depends mostly on where your business is at the moment and what your needs are: Businesses anticipating plenty of credit card traffic immediately and those expecting to build up a digital payment base over time need different providers.

Smaller companies tend to go with payment service providers (PSP) first because the number of initial transactions doesn’t yet justify shelling out for a merchant account.

A merchant account is the second option, and it’s the one most results point to when researching how to accept credit card payments. Essentially, it’s a specialized business bank account that presents the cheapest long-term solution.

Fancier methods for those who feel tech-savvy enough will best serve you if your company’s products have the younger generations as their target audience. Even more so if you’re selling your goods online through an eCommerce platform and need an online credit card processor to start running your business in the first place.

Last but not least, allowing mobile payments is the newest addition to the list of ways to accept credit card payments and one that your younger customers will highly appreciate. After all, our phones are practically glued to our hands, so the risk of being caught unprepared is minimal, and all you need to do is install an app. In all likelihood, this will soon become the preferred payment method for everyone.

Now, let’s figure out which one will benefit your business the most.

Payment Service Providers

Payment service providers are an excellent solution for small businesses. While this is not the cheapest way to accept credit card payments, in the long run, it is the simplest to use.

The fact that it costs nothing to set up is hugely beneficial to small businesses, and you don’t need to lock yourself into a long-term contract, either.

The most popular payment service providers are Paypal, Stripe, and Adyen. Here is a quick overview of their fees:

PayPal Stripe Adyen
Domestic: 3.4% + $0.30 2.9% + $0.30 Up to 12% + fixed fee based on payment method
International: 4.4% + fixed fee based on currency The rate is the same for all cards. Minimum invoice of €100 (120 USD) per month

However, before you decide on a company to process your credit card payments, check the reviews online. Make sure your choice is reliable and that its customer support team is supportive enough.


Some users of specific companies complain about the money on their account being held up or that the fraud prevention team is acting up - these things happen everywhere from time to time, but make sure that the provider you choose has minimal issues of that kind.

Merchant Account

If you’re already handling a healthy amount of monthly transactions, signing up for a merchant account is the best way to accept credit cards. Essentially, a merchant account is nothing more than a bank account where the bank acts as an intermediary between your business and the credit card company.

It would be best if you chose the credit card companies you want to work with through the merchant account. Going with Visa and Mastercard is always a safe bet, but read the fine print and make sure that the cards you opt for are accepted and used in your country of operation.

While it may seem daunting, signing up for accepting credit card payments this way is a piece of cake. Filling out an application is free, and approval takes only a few days. Sometimes you’ll get the required equipment for free, too, but always be wary of prolonged contracts and check them for early termination fees.

Most importantly, this is the best way to run a long-term digital payment model. The per-month and per-transaction fees make it seem more expensive than PSP, but with sufficient monthly transactions, these stack up a lot less slowly than flat fees. All things considered, this is the cheapest credit card processing solution.

eCommerce Platform

The option to get your shopping done from the comfort of your home changed the world, and the subsequent expansion of eCommerce platforms was lightning-quick. Many vendors chose to invest in building their store online rather than renting a place and opening a brick-and-mortar one. It’s simpler, easier to manage, and ultimately, it’s the way people shop these days.

If you’re planning to open an e-store and start selling there, one of the first things you’ll have to learn is how to accept credit card payments online.

First, you choose an eCommerce platform. The most popular ones are eBay, Shopify, and Etsy, but there are many others, and each of them has a built-in payment processor. In other words, you won’t have to set anything up manually.

Check the payment options for fees, though, as they’re not all the same, and you’ll probably need some time to figure out which option fits your business best. But even with that, moving your store online significantly cuts down on any potential hassle.

Mobile Payments

If you want to set up a credit card payment system, you might consider accepting mobile payments as well.

Growing in popularity during the last couple of years, mobile payment systems use NFC and QR technology to allow customers to make payments via their mobile devices. Most of your young customers are already using Apple Pay, Android Pay, and Samsung Pay for their day-to-day shopping.

Using a reputable mobile payment processor is a must, though. As with any new technology, security is the primary concern, as many users worry about their privacy getting compromised this way. You’ll need an NFC-enabled terminal to accept mobile payments and ensure their safety.

Summing Things Up

If you came here wondering how to accept credit card payments, we hope you now have an answer. Considering how much money you are missing out on without it, enabling digital payment is a significant step forward for any business.

Frequently Asked Questions
Can an individual accept credit card payments? +

Yes. The most common method is getting paid via PayPal. PayPal allows your customers to pay you via credit card even if you don’t have a business account.

How can I accept credit card payments for my small business? +

As mentioned in the guide above, you can use one of four ways to accept credit card payments: PSP, a merchant account, an e-commerce platform, or mobile payment. Each has its pros and cons, so make sure that the one you choose is the one that fits your business and - most importantly - your customers, the best.

How can I accept credit card payments for free? +

Unfortunately, in this situation, there is no such thing as free lunch. Card issuers like Visa and Mastercard always charge a non-negotiable fee, thus eliminating fee-free credit card payments.

How can I accept credit card payments with my phone? +

If you are looking to accept credit card payments with your phone, you might want to check some of the available apps and get a matching reader. Occasionally, you can find a two-for-one deal, where you’ll have the reader within the app.

Can I pay a private seller with a credit card? +

Yes, but only via PayPal, which will incur a fee.

What is the cheapest way to take credit card payments? +

If you’re wondering how to accept credit card payments without it costing an arm and a leg, the answer will depend on the number of transactions you handle monthly. The cheapest solution, in the long run, is setting up a merchant account.

However, the monthly or per-transaction fees can be costly if you’re just starting out. If this is the case, go with a PSP solution until you establish enough transactions for a merchant account to pay off.

About author

Albert Einstein is said to have identified compound interest as mankind’s greatest invention. That story’s probably apocryphal, but it conveys a deep truth about the power of fiscal policy to change the world along with our daily lives. Civilization became possible only when Sumerians of the Bronze Age invented money. Today, economic issues influence every aspect of daily life. My job at Fortunly is an opportunity to analyze government policies and banking practices, sharing the results of my research in articles that can help you make better, smarter decisions for yourself and your family.

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