How to accept credit card payments as a small business

How to accept credit card payments: the four setups

To accept credit card payments you need two things: an account with a payment provider, which moves money from the buyer's card to your bank, and a way for the buyer to pay. For a small maker that means one of four setups. Many sellers use two of them, for example a reader at markets and payment links for custom orders, with the same provider.

The table lists each setup, what you need for it and the fee a US seller pays on a standard domestic card at each provider's published rate. Your own rate can differ by plan and by card type.

How to accept credit card payments as a small business, step by step

The order is the same with every provider. Most of the work is the account sign-up, which asks for your identity, business and bank details before the provider pays you out.

1. List where buyers pay you

   Write down where sales happen today: in person, through messages, or on a website. That decides whether you need a reader, a payment link, a store checkout or a mix of them.

2. Pick one provider for all of it

   One provider for in-person and online sales keeps sales, refunds and payouts in one report, and one set of fees to track. Square, Stripe, PayPal and SumUp each sell a card reader and also take card payments online.

3. Open the account

   Sign up with your name or business name, your identity details and the bank account that will receive payouts. The provider checks these details before it sends you money, so do this a few days before you need it.

4. Set up the way buyers pay

   For in-person sales, install the provider's app and pair a reader, or turn on tap to pay on your phone. For online sales, create a payment link or connect the provider to your store builder.

5. Run a test sale

   Charge a small amount to your own card, then refund it. Check the receipt, the fee and the payout before your first market day, so a problem shows up at home and not at the stall.

6. Record the fees

   Payouts arrive with the fees already taken out. Record the full sale and the fee as separate lines, so your books show your true income and what card processing costs you each month.

Taking cards in person: a reader or your phone

A card reader is the usual choice for markets and fairs. It takes tapped and inserted chip cards and phone wallets, and pairs with the provider's app on your phone or tablet. A reader is a one-time purchase, and every sale then pays the provider's in-person rate.

Tap to pay turns a recent phone into the reader. The buyer holds a card or phone wallet near your phone, and you pay the provider's in-person rate. Square's Tap to Pay on iPhone accepts contactless cards, Apple Pay, and other digital wallets, so a buyer with an older card that only has a chip needs another way to pay. Stripe adds $0.10 per authorization for Tap to Pay on top of its in-person rate.

Card-present rates are lower than online rates with every provider in the table. If most of your sales happen face to face, the in-person rate is the one that decides your monthly card cost.

What one $30 in-person card sale costs

The same $30 sale, with the card tapped or inserted on a reader, at each provider's published in-person rate for a US seller. Shopify POS is included for sellers who already run a Shopify store.

Taking cards online without a store: payment links and invoices

A payment link is a checkout page the provider hosts for you. You create it in the provider's app or dashboard, send it by text, email or direct message, and the buyer pays by card on their own device. It is the simplest way to take a card for a custom order, a commission or a sale agreed in messages, and it needs no website.

An invoice works the same way and adds line items, a due date and a record of what was ordered. Both are card-not-present payments, so they cost more per sale than a card tapped in person.

Typing a buyer's card number into the app yourself, for example when they read it out over the phone, has its own rate. Square charges 3.5% + 15¢ for a typed-in card, PayPal Point of Sale charges 3.49% + $0.09, and Stripe adds +0.5% to its online rate. A payment link also means the buyer enters their own card details, so you never handle the number.

Taking cards in your own online store

If buyers browse a catalog and order on their own, card payments come built into the store builder. Shopify Payments charges 2.9% + 30¢ online on the Basic plan, which costs $39 a month, and there is no transaction fee with Shopify Payments. Using a different payment provider on Shopify adds a 2% fee on Basic. The Shopify POS pricing page lists casual in-person selling included in every plan, at 2.6% + 10¢ per card on Basic, so the same account covers a market stall.

Square Online has no monthly fee on Square Free and charges 3.3% + 30¢ per online card sale. The same Square account takes in-person payments at 2.6% + 15¢, so stock and sales from markets and the website sit in one place.

A store checkout costs about the same per sale as a payment link with the same provider. The difference is the work: the store lists your products and takes orders without you sending each buyer a link.

Other card fees to plan for

The per-sale rate is the main cost, but a few other fees appear once you sell regularly. Check each one on your provider's fee page before you sign up.

• International cards: Stripe adds +1.5% and PayPal adds 1.50% on top of the domestic rate.
• Disputes: when a buyer disputes a charge, Stripe charges $15.00 and PayPal charges 15.00 USD, and you lose the sale amount as well if the dispute goes against you.
• Instant payouts: standard payouts cost nothing, but money the same day costs 1.5%, minimum fee of 50¢ on Stripe and 1.50% of amount transferred on PayPal.
• Refunds on Stripe: No refund fee; original fees not returned. A refunded sale still costs you the original processing fee.

Where Nation fits

Questions about accepting credit card payments