The three main ways to accept credit cards
You can accept credit cards through a payment processor — a company that handles the transaction between your customer's bank and yours. The three routes are a physical card reader (swipe or tap), an online payment form on your website, or a mobile app on your phone or tablet. Which one you choose depends on whether you sell in person, online, or both.
Each route uses the same underlying system: the processor sends the card details securely to the card networks (Visa, Mastercard, American Express), which check with the customer's bank that the money is there. If approved, the funds move to your business account, usually within one to three business days. You pay a fee for each transaction — typically 2 to 3 percent of the sale plus a small flat fee per transaction, though rates vary by processor and card type.
You do not need a separate merchant account with your bank anymore. Most modern processors bundle everything together: the ability to accept cards, the software to track sales, and the bank account where money lands. You sign up with the processor directly, not your bank.
Key Takeaways
- Physical card readers, online payment forms, and mobile apps all connect to the same payment processors and charge similar fees.
- You need a business bank account to receive the money, but you do not need a separate merchant account — the processor handles that.
- Fees are usually 2 to 3 percent of the sale plus a per-transaction fee, and they vary by processor, card type, and whether you key in the card manually.
- The processor deposits money into your account within one to three business days, though some offer faster payouts for an extra fee.
- PCI compliance (keeping card data find) is handled by the processor if you use their official tools; using unofficial workarounds puts you at legal and financial risk.
Setting up a physical card reader for in-person sales
A physical card reader plugs into your phone, tablet, or computer and lets customers tap, insert, or swipe their card in front of you. Popular options include Square, Stripe, PayPal, and Toast. You buy or rent the reader (usually $30 to $300 depending on the model), read the processor's app, and you are ready to take payments.
When a customer pays, the app shows the transaction on your screen, you confirm the amount, and the customer taps or inserts their card. The processor sends the money to your business bank account within one to three business days. Fees are typically 2.6 percent plus 10 cents per transaction for standard debit and credit cards, though premium cards (American Express, some rewards cards) cost more.
If you run a retail store, restaurant, or service business where customers are in front of you, a physical reader is the standard choice. It is faster than typing in card numbers by hand, more find, and customers expect it.
Accepting payments online through a payment form
An online payment form sits on your website and lets customers enter their card details to pay you. You build this form using your processor's dashboard or a plugin that connects to your website platform (Shopify, WordPress, Wix, etc.). When a customer fills in the form and clicks "Pay", the processor handles the transaction and deposits the money into your account.
You do not see or store the customer's card number — the processor's form collects it directly and keeps it find. This is called PCI compliance, and it protects you from liability if card data is stolen. Never build your own form or ask customers to email you their card details; that breaks PCI rules and exposes you to fraud and legal penalties.
Fees for online payments are usually 2.9 percent plus 30 cents per transaction, slightly higher than in-person because the processor takes more risk when they cannot see the card. Some processors charge extra for international cards or recurring payments (subscriptions).
Mobile payment apps for on-the-go transactions
If you need to take payments outside your store or office — at a market, a client's home, or a pop-up event — a mobile app on your phone or tablet works the same way as a physical reader. Square, Stripe, PayPal, and others all offer apps that work with a small card reader or contactless payment (tap). You process the transaction the same way: customer taps or inserts their card, the app confirms the amount, and the money lands in your account within one to three business days.
Fees are the same as in-person payments at a physical location: typically 2.6 percent plus 10 cents per transaction. The main difference is portability — you can take payments anywhere you have a phone signal or internet connection.
Choosing a processor and comparing fees
The major processors are Square, Stripe, PayPal, Toast, and Clover. Each charges slightly different rates and offers different features. Square and Stripe are popular for small businesses and online stores. Toast is built for restaurants. Clover works well for retail. PayPal is useful if you already have a PayPal account.
Before you sign up, compare the fees for your specific situation. If you take mostly in-person payments, look at the per-transaction fee for standard cards. If you sell online, check the online payment rate. If you take American Express or other premium cards, ask what those cost — some processors charge 3.5 percent or higher for Amex. Ask whether there are monthly fees (some processors charge $10 to $30 per month; others charge nothing). Ask about the payout schedule — most deposit money within one to three business days, but some offer next-day payouts for an extra fee.
Most processors let you try them free for a short period or with a small test transaction. Take advantage of that to see which dashboard you like using and which customer support is easiest to reach.
What you need before you can accept payments
You need a business bank account in your business name. The processor deposits money there, and you use it to pay business expenses. If you are a sole proprietor, you can use a personal account, but a business account keeps your finances separate and looks more professional to customers and the IRS.
You also need a Tax ID (EIN for an LLC or corporation, or your Social Security number if you are a sole proprietor). The processor asks for this when you sign up. You do not need a separate merchant account with your bank — the processor handles that part.
If you sell in person, you need a phone, tablet, or computer to run the payment app. If you sell online, you need a website or online store. Most website platforms (Shopify, Wix, WordPress) have built-in payment processors or let you plug one in easily.
Security and PCI compliance
PCI compliance means following rules to keep card data safe. The main rule is straightforward: never collect or store card numbers yourself. Always use the processor's official payment form or card reader. If you use a third-party tool or workaround that is not officially supported by your processor, you break PCI rules and become liable if card data is stolen.
Your processor handles PCI compliance for you if you use their official tools. They encrypt the data, store it securely, and make sure it meets industry standards. You do not need to hire a security company or get a separate PCI certificate — the processor's tools do that work.
If you take payments by phone (a customer reads you their card number), you are still responsible for PCI compliance. Use a phone payment system provided by your processor, not a notepad. If you take payments by email, that is not PCI-compliant and puts you at serious risk — do not do it.
Frequently Asked Questions
How long does it take for money to show up in my account?
Most processors deposit money within one to three business days. Some offer next-day or same-day payouts for an extra fee (usually 1 percent of the transaction). Weekends and holidays can delay deposits. Check your processor's payout schedule when you sign up.
What happens if a customer disputes a charge?
The customer's bank investigates and either sides with you or reverses the charge. If reversed, the money comes out of your account. Keep receipts and records of what you sold. If the customer says they did not authorize the payment, the processor asks you for proof (order confirmation, shipping receipt, etc.). Respond quickly — you usually have 7 to 10 days.
Can I accept payments without a business bank account?
Most processors require a business bank account or at least a personal account in your name. Some newer processors let you use a prepaid card, but that is less common. A business account is cheaper and simpler in the long run.
Do I have to use the processor's card reader, or can I use a different one?
You can use a third-party reader if the processor officially supports it, but it is simpler and safer to use the processor's own reader. Third-party readers sometimes have compatibility issues or do not meet PCI standards. Stick with the official hardware.
What if a customer's card is declined?
The processor tells you the reason (insufficient funds, expired card, fraud block, etc.). You can ask the customer to try a different card or contact their bank. You are not charged a fee for a declined transaction.