You can let someone pay you with a credit card by using a payment app, an online invoicing tool, or a small card reader connected to your phone. The right method depends on whether you’re collecting a one-time personal payment, invoicing for freelance work, or selling something in person. Each option takes minutes to set up, but they all come with processing fees that eat into what you receive.
Payment Apps for Quick Transfers
If you just need one person to send you money and they want to use a credit card, a peer-to-peer payment app is the fastest route. PayPal and Venmo both let senders link a credit card and pay another individual directly. The sender downloads the app, adds their card, and sends money to your account using your email, phone number, or username. You then transfer the funds to your bank.
The catch is that the sender typically pays a fee when funding with a credit card instead of a bank account. On both PayPal and Venmo, that fee is around 3% of the transaction, and it’s charged to the person sending the money. So if someone sends you $500 from a credit card, they’ll actually pay roughly $515. Make sure the person paying you understands this before they hit send, or you may end up fielding a confused text message afterward.
Zelle, the payment service built into many banking apps, does not support credit cards at all. It only works with linked bank accounts. If the person paying you specifically wants to use a credit card, Zelle isn’t an option.
Online Invoicing for Freelance or Contract Work
If you’re doing freelance work, selling a service, or billing a client, sending a digital invoice with a built-in “pay now” button is the most professional approach. Platforms like Square, PayPal, and Stripe let you create and email invoices that your client can pay instantly with a credit card. No special equipment needed.
Square charges no monthly fee and processes online credit card payments at 3.3% plus 30 cents per transaction on its free plan. So on a $1,000 invoice, you’d receive about $966.70 after fees. PayPal and Stripe charge similar rates for online card payments, generally in the range of 2.9% to 3.5% plus a flat per-transaction fee.
These fees come out of your end, not the payer’s. Your client sees the invoice total, clicks a link, enters their card number, and pays the full amount. The platform deducts its cut before depositing the rest into your bank account, usually within one to two business days.
Setting up an account on any of these platforms is free and takes about 10 minutes. You’ll enter your name, bank account details for deposits, and basic business information (even if your “business” is just you). Once you’re verified, you can send your first invoice immediately.
Accepting Cards in Person
If you need to accept a credit card face to face, whether you’re at a farmers market, doing a home repair, or running any kind of in-person transaction, a mobile card reader turns your smartphone into a payment terminal.
Square sells a basic card reader that plugs directly into your phone for $10. You download the Square app, sync the reader, and you’re ready to accept chip cards, swipes, and contactless tap payments. Shopify and PayPal offer similar Bluetooth card readers that connect wirelessly to your phone or tablet. Most of these devices arrive charged and ready to use out of the box.
In-person processing fees are lower than online fees because physical card-present transactions carry less fraud risk. Square’s in-person rate on its free plan is 2.6% plus 15 cents per transaction. A $200 payment would cost you about $5.35 in fees, leaving you with $194.65.
You can also skip the hardware entirely on newer iPhones and Android devices. Square and several other processors now offer tap-to-pay directly on your phone’s screen, no external reader required. The customer holds their card or phone near yours, and the payment goes through.
Processing Fees Compared
Every method of accepting credit card payments involves a processing fee. Here’s how the costs break down by payment type:
- Payment apps (Venmo, PayPal P2P): Around 3% charged to the sender when they use a credit card. You receive the full amount.
- Online invoices (Square, PayPal, Stripe): Roughly 2.9% to 3.5% plus 15 to 30 cents per transaction, deducted from your payout.
- In-person card readers: Typically 2.4% to 2.7% plus 15 cents per transaction, deducted from your payout.
If you’re only collecting payments occasionally, the free-tier plans from Square or PayPal make the most sense because there’s no monthly subscription. You only pay when money actually comes in. If you’re processing thousands of dollars per month, higher-tier plans with lower per-transaction rates start to save money. Square’s Premium plan, for example, drops in-person rates to 2.4% plus 15 cents.
Creating a Payment Link Without a Website
You don’t need a website or even an invoice to let someone pay you with a credit card. Most payment platforms let you generate a simple payment link, sometimes called a checkout link, that you can text, email, or drop into a DM. The person clicks it, enters their card info on a secure page hosted by the processor, and the money lands in your account.
Square, PayPal, and Stripe all offer this feature on their free plans. You set the amount (or leave it open for the payer to enter), grab the link, and share it however you want. This works well for one-off situations like splitting a group purchase, collecting dues for a club, or billing someone for a small job without the formality of a full invoice.
Tax Reporting When You Accept Card Payments
When you receive payments through a third-party platform like Square, PayPal, or Venmo, the IRS requires that platform to send you a Form 1099-K if your total payments exceed $20,000 and you have more than 200 transactions in a calendar year. This form reports your gross payment volume to both you and the IRS.
Falling below that threshold doesn’t mean the income is tax-free. You’re still responsible for reporting all income you earn, regardless of whether you receive a 1099-K. The form just determines whether the payment platform is also telling the IRS about it. If you’re collecting payments for goods or services, keep your own records of what you received and what it was for.
Personal payments, like a friend reimbursing you for concert tickets, aren’t taxable income and shouldn’t trigger reporting. But if you’re regularly accepting credit card payments for work or sales, treat that money as business income from the start so you’re not scrambling at tax time.