How Can I Accept Credit Card Payments?

How Can I Accept Credit Card Payments?
If you don’t accept credit cards, you’re missing out on potential sales. Read this step-by-step guide on how to start accepting credit cards.
by Square Jan 26, 2024 — 5 min read
How Can I Accept Credit Card Payments?

The percentage of cash payments has been on the decline for some time, and with lingering effects of the pandemic and increased availability of contactless payment options, wallets are being left at home entirely. With so many alternatives to cash, it can be confusing for a small business to know how to get started accepting credit card payments.

This article covers how to accept credit card payments and the methods you can use to get paid in person, online, and remotely.

Benefits of accepting credit card payments

According to the 2024 Square Future of Commerce report, 47% of retailers currently accept traditional card payments, and 48% of customers prefer a contactless payment method. Here are some reasons why you should accept credit card payments at your small business: 

How to take credit card payments

Once you’ve decided to start accepting credit cards, you’ll need to have a few things in place. First, it’s important to understand the difference between a merchant account and a merchant services provider. 

merchant account is opened directly with a bank or financial institution that allows you to accept payments by credit card. When a business accepts a credit card payment, the payment transactions and funds are held in the merchant account until the payment is verified and the funds are transferred to the business bank account. 

Alternatively, merchant service providers, like Square, manage the merchant account for you and handle the hardware, software, and financial services needed for a business to accept and process credit cards, debit cards, and other contactless payments. 

Next, you’ll want to decide how to take credit card payments. Depending on the type of business you have, you may want to have more than one option to take credit card payments:

Once you understand your needs for taking payments, you can choose a payment processing system that fits those needs. With a merchant account, you’ll need to apply for the account and purchase your own hardware for accepting credit card payments. Additionally, fees can vary depending on the credit card issuer and even the type of card entry (swipe, tap, manual, etc.). Merchant services providers can be more cost-effective and easier to set up since they provide the hardware and handle the merchant account requirements.

Whether you’ve chosen to open a merchant account or go with a merchant services provider, you’ll need to decide on the software and hardware you need to collect your customers’ payment information. Depending on the type of small business you have, you may need software and/or hardware.

Software

Hardware

POS Hardware

How to accept credit card payments online

If some or all of your sales are completed online, there are plenty of ways you can set up convenient credit card payment options for your customers. Small businesses, such as eCommerce shops or digital service providers, rely on completing their entire transaction without the need for in-person interaction. 

If you are looking to process credit card payments online, you’ll want to consider these options:

Credit card processing fees

To process a sale, there are several types of fees and regulations that apply to each transaction. These fees are set by cardholder banks and credit card issuers, and it’s important to know how they can impact your profits.

While small business owners are often concerned with the costs of credit card processing, offering additional payment options to your customers can often lead to more transactions, which can offset the costs. As a small business owner, you should analyze if and how much credit card processing fees will eat into your profits and what you can do to offset them.

Now that you understand your options for taking credit card payments as a small business owner, you’ll no longer have to miss out on those additional credit card transactions. With flat fees that you’re aware of upfront with Square payment processing, you can look more professional and give your customers the payment and security options that they’ve been looking for.

Square
The Bottom Line is brought to you by a global team of collaborators who believe that anyone should be able to participate and thrive in the economy.

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