The fastest way to accept credit cards depends on your business size and sales volume
You can accept credit card payments through a payment processor — a company that handles the transaction between your customer's bank and yours. The processor charges you a fee (usually 2 to 3 percent of each sale, plus a small flat fee per transaction). You need three things to start: a business bank account, a way to process the payment (a card reader, online form, or invoice link), and a merchant account with a payment processor.
The simplest option for a small business or freelancer is a mobile card reader paired with an app on your phone. The most common are Square, PayPal, and Stripe. For a brick-and-mortar store, you might use a point-of-sale (POS) system. For online sales, you embed a payment form on your website or send invoices with a payment link. All three routes use the same underlying technology — they just look different depending on where your customer is when they pay.
Key Takeaways
- Mobile card readers (Square, PayPal, Stripe) are the cheapest way to start if you have fewer than 20 transactions per day and can process payments on your phone.
- You will pay between 2 and 3 percent of each sale plus a per-transaction fee, which varies by processor and payment method (card-present, online, or invoice).
- You need a business bank account and a tax ID (EIN) to open a merchant account, though some processors accept sole proprietors with just a Social Security number.
- Payment processors deposit money into your bank account within one to three business days, not when ready.
- If you sell online, you can send a payment link via email or embed a form on your website without building custom code.
Choose a payment processor based on where you take payments
The three main routes are in-person (using a card reader), online (using a website form or payment link), and invoice-based (sending a link to a customer to pay later). Some processors handle all three; others specialize in one.
For in-person payments: Square, PayPal, and Stripe all offer mobile card readers that plug into your phone's headphone jack or connect via Bluetooth. You swipe or insert the card, the app processes it, and the money goes to your bank account. These are best if you're a freelancer, contractor, or small retail business. Fees are typically 2.75 percent plus $0.15 per transaction for card-present payments (when the customer's card is physically present).
For online payments: If you have a website, you can embed a payment form directly into a checkout page. Stripe and Square both offer this. You can also use PayPal's checkout button. Fees for online payments are usually 2.9 percent plus $0.30 per transaction. If you don't have a website, you can send customers a payment link via email or text — they click it, enter their card details, and pay. This works for invoices, deposits, or one-off sales.
For invoice-based payments: Processors like Square Invoices, PayPal Invoicing, and Stripe Billing let you create an invoice, email it to the customer, and include a payment link. The customer clicks, pays, and you get notified. This is common for service businesses, consultants, and contractors who bill after work is done.
Set up a merchant account with a payment processor
A merchant account is your contract with the payment processor. It's where the processor holds your money briefly before depositing it into your bank account. To open one, you'll need:
- A business bank account (in your business name, not personal)
- A tax ID (EIN) or Social Security number if you're a sole proprietor
- A government-issued ID (driver's license or passport)
- Your business address
- Your average monthly sales volume (an estimate is fine)
Most processors let you sign up online in 10 to 15 minutes. Square, PayPal, and Stripe all have straightforward applications. You'll answer questions about your business type, how much you expect to process per month, and your industry. Some processors (especially if you're in high-risk industries like e-commerce or subscription services) may ask for additional documents like a business license or proof of address.
Once approved, you'll receive login credentials and can start processing payments when ready. If you're using a mobile card reader, the processor will ship it to you (usually within 3 to 5 business days). If you're using online payments, you can start right away — no hardware needed.
Understand the fees you'll pay
Payment processors make money by taking a cut of each transaction. The fee structure depends on how the payment is made:
| Payment Type | Typical Fee | When You Use It |
|---|---|---|
| Card-present (swiped or inserted) | 2.6–2.9% + $0.10–$0.15 | In-person with a mobile reader or POS |
| Card-not-present (online or phone) | 2.9–3.5% + $0.30 | Website checkout, payment link, or phone order |
| ACH bank transfer | $0.25–$1.00 flat fee | Customer pays from their bank account directly |
| Monthly subscription | $0–$300/month | Recurring charges (e.g., membership or SaaS) |
Card-present payments (when you physically see the card) have lower fees because the fraud risk is lower. Card-not-present payments (online or over the phone) have higher fees because fraud is more common. Some processors also charge a monthly minimum or a flat monthly fee instead of per-transaction fees — this is usually worth it only if you process more than $10,000 per month.
There are no hidden fees, but read the fine print for things like monthly statement fees, batch fees (charged when you close out your day's sales), or chargeback fees (if a customer disputes a charge). Most small processors don't charge these, but some do.
Connect your payment processor to your bank account
Before you can receive money, you need to link your business bank account to your merchant account. The processor uses this account to deposit your sales revenue. During setup, you'll provide your bank account number and routing number (found on the bottom left of a check or in your bank's app).
Some processors verify your account by depositing two small amounts (usually under $1 each) into your bank account. You'll then log into your processor's dashboard and confirm the amounts. This takes 1 to 2 business days. Once verified, deposits happen automatically — usually within 1 to 3 business days after a sale.
A few processors offer same-day deposits for an extra fee (typically 1 percent of the transaction). This is useful if you need cash quickly, but it costs more. Most small businesses use the standard deposit schedule.
Process your first payment and monitor transactions
Once your account is set up and verified, you're ready to take payments. The exact steps depend on your method:
With a mobile card reader: Open the app, enter the payment amount, and have the customer insert or swipe their card. The app shows whether the payment went through. If it does, you get a receipt (digital or printed). The money appears in your bank account 1 to 3 business days later.
With a payment link: Create an invoice or payment request in your processor's dashboard, add the customer's email, and send it. They click the link, enter their card details, and pay. You get notified when ready. The money deposits the same way.
With a website form: A customer adds items to a cart, clicks checkout, enters their card details on your payment form, and completes the purchase. The processor handles the transaction in the background. You see the sale in your dashboard when ready.
All processors give you a dashboard where you can see every transaction, refund payments, read reports, and manage your account. Spend time getting familiar with it — you'll use it to track sales, reconcile with your bank account, and handle disputes if they come up.
Handle refunds and chargebacks
If a customer asks for their money back, you can issue a refund directly from your processor's dashboard. The refund goes back to their card within 1 to 3 business days. You're not charged a fee for issuing a refund, but the original transaction fee is not returned to you.
A chargeback is different — it's when a customer disputes a charge with their bank instead of asking you for a refund. The bank investigates and either sides with you or the customer. If the customer wins, the money is taken from your account and you're charged a chargeback fee (usually $15 to $100). Chargebacks are rare for legitimate businesses, but they happen. To avoid them, keep clear records of what you sold, send receipts, and respond quickly if a customer complains.
Frequently Asked Questions
Do I need a separate business bank account to accept credit cards?
Yes. Payment processors require a business bank account in your business name. If you're a sole proprietor, you can use your Social Security number instead of an EIN, but the account still needs to be registered as a business account, not personal. This keeps your business and personal finances separate and makes taxes easier.
What's the difference between Square, PayPal, and Stripe?
All three work similarly and charge similar fees (2.6–2.9% plus per-transaction fees). Square is easiest for beginners and has the best in-person experience. PayPal is good if you already use PayPal for other things. Stripe is more flexible for developers and online businesses. Pick based on where you take most payments and which dashboard you find easiest to use.
How long does it take to get approved?
Most processors approve you within minutes to a few hours. If they need more information (like a business license), it can take 1 to 3 business days. Once approved, you can start processing payments when ready if you're using online payments. If you ordered a physical card reader, it ships separately and arrives in 3 to 5 business days.
Can I accept credit cards if I don't have a website?
Yes. You can use a mobile card reader for in-person payments, or send payment links via email or text for remote customers. You don't need a website at all. Many freelancers, contractors, and service providers use only payment links and never build a website.
What happens if a customer's card is declined?
The processor tells you when ready — the payment doesn't go through. You can ask the customer to try a different card, or they can contact their bank to find out why it was declined (insufficient funds, fraud block, expired card, etc.). You're not charged a fee for a declined transaction.