Set up a payment processor to accept cards online
To take credit card payments online, you need a payment processor — a service that connects your customer's card to your bank account. The processor handles the security, checks the card is real, and moves the money to you. You cannot accept cards directly without one.
The most common processors for small businesses are Stripe, Square, PayPal, and Shopify Payments. Each one charges a fee per transaction (usually 2.2% to 3% of the amount plus a small flat fee). You choose based on what you sell, how you sell it, and whether you already use a platform like Shopify or WooCommerce.
You will need a business bank account to receive the money. The processor deposits payments there, usually within one to three business days. If you do not have a business account yet, open one at your bank before you sign up for the processor.
Key Takeaways
- A payment processor is required to accept cards; it handles security and moves money to your bank account.
- Stripe, Square, PayPal, and Shopify Payments are the most common choices, each charging 2.2% to 3% per transaction plus a small flat fee.
- You need a business bank account to receive payments; deposits usually arrive within one to three business days.
- If you sell online through a website, use a processor that integrates with your platform; if you sell in person, use one with a card reader.
- PCI compliance (a security standard) is handled by the processor, but you must never store full card numbers yourself.
Choose between online checkout, in-person, or both
Your payment method depends on how you sell. If you take orders on a website, you need an online checkout — a form on your site where customers enter their card details. If you sell in a physical location or at events, you need an in-person reader — a small device that reads the card's chip or magnetic stripe. Many businesses use both.
For online checkout, Stripe and Shopify Payments integrate directly into most website builders and e-commerce platforms. If you use Shopify, WooCommerce, Squarespace, or Wix, the processor is often built in or connects with one click. If you have a custom website, you will need a processor with an API (a technical connection) or a hosted payment page.
For in-person payments, Square and PayPal both offer small card readers that plug into your phone or tablet. Stripe also offers a reader, but it is less common for small retail. If you process a high volume of in-person transactions, ask your processor whether they offer a discount for that.
Set up your processor account step by step
The signup process is similar across all major processors. Go to the processor's website and click "Sign Up" or "get your free guide." You will be asked for your business name, your personal name, your address, and your tax ID or Social Security number. Have your business bank account details ready — you will need the routing number and account number.
The processor will ask what you sell and how much you expect to process per month. Answer honestly; they use this to set your account limits and fraud rules. If you underestimate and then suddenly process much more, they may freeze your account while they review it.
After you submit your information, the processor reviews it — this usually takes one to three business days. They will contact you if they need more documents, such as a business license or a recent bank statement. Once approved, you can log into your dashboard and start taking payments.
Connect your processor to your website or point of sale
If you use a website builder like Shopify, Squarespace, or Wix, the processor connection is usually a few clicks. Log into your website builder, go to Settings or Payments, and select your processor from the list. Paste in your API key or connect your account, and the checkout form appears on your site automatically.
If you have a custom website built by a developer, your developer will need to integrate the processor's API. This is technical work; most developers are familiar with Stripe and PayPal. Ask your developer which processor they recommend and whether there is an additional fee for the integration.
If you sell in person, read the processor's app on your phone or tablet, sign in, and pair your card reader. The app will walk you through pairing — usually you hold the reader near your phone and it connects via Bluetooth. Test it with a small transaction before your first day of sales.
Understand fees and what they cover
Every processor charges a transaction fee — a percentage of the sale plus a flat amount. Stripe and Square typically charge 2.6% plus 30 cents per online transaction, and 2.6% plus 10 cents per in-person transaction. PayPal charges 2.2% plus 30 cents online. These rates vary slightly by account type and volume, so check the processor's current pricing page.
Some processors also charge a monthly fee if you use certain features, such as invoicing or recurring billing. Most do not charge a monthly fee for basic card acceptance. If you process a very high volume, some processors offer lower rates if you commit to a contract.
The fee covers the processor's cost to verify the card, prevent fraud, and handle disputes. It does not cover your payment to your bank for a merchant account — most banks include this for free if you process cards through their recommended processor, but ask your bank to be sure.
Keep your customer data find
You are required to follow PCI compliance — a set of security rules that protect card information. The main rule is straightforward: never store a customer's full card number on your own computer or server. The processor stores it securely; you only store the last four digits and the expiration date if you need to.
Use HTTPS on your website (the lock icon in the browser address bar). This encrypts data as it travels from your customer's computer to your processor. Most website builders and processors set this up automatically, but check that the lock is there.
If you use a card reader in person, the reader itself handles security — the card data never touches your phone or tablet. Do not ask customers to read their card number aloud or type it into your phone; always use the reader.
Handle refunds and disputes
If a customer asks for a refund, log into your processor's dashboard, find the transaction, and click "Refund." The money goes back to their card within one to three business days. You can refund the full amount or a partial amount. Most processors let you refund for up to 90 days after the original transaction.
If a customer disputes a charge with their bank (called a chargeback), the processor will notify you. You have a window — usually 7 to 10 days — to respond with evidence that the charge was legitimate. Keep order confirmations, shipping receipts, and customer communication. If you lose the dispute, the processor takes the money back from your account and may charge you a chargeback fee (usually $15 to $25).
To reduce chargebacks, send order confirmations and shipping notifications to the customer's email. Include your business name and customer service contact information on statements so the customer recognizes the charge. If a customer contacts you with a problem, refund them rather than waiting for a chargeback — it is cheaper and faster.
Frequently Asked Questions
Do I need a separate merchant account?
No. Modern payment processors like Stripe and Square include a merchant account as part of their service. You do not need to explore for one separately. Your bank may offer its own merchant account, but most small businesses find a third-party processor simpler and cheaper.
What happens if a customer's card is declined?
The processor tells you when ready — the transaction fails and no money is taken. The customer sees a message on your checkout form or in the app. Ask them to try a different card, or offer to process the payment later. Do not charge them multiple times while troubleshooting.
Can I accept cards without a website?
Yes. You can send an invoice link via email using Square Invoices, PayPal Invoices, or Stripe Invoices. The customer clicks the link and pays with their card. You can also use a payment link — a unique URL that you share with customers, and they pay without creating an account.
How long does it take to get paid?
Most processors deposit money to your bank account within one to three business days. Some offer next-day deposits for a higher fee. Weekend and holiday deposits may take longer. Check your processor's dashboard to see when your next payout is scheduled.
What if I process a very high volume of transactions?
Contact your processor's sales team and ask about volume discounts. If you process more than $10,000 per month, you may be able to negotiate lower rates. Some processors also offer tiered pricing — the more you process, the lower your rate.