To get paid by credit card, you need a way to process the transaction and deposit the funds into your bank account. For most small businesses and freelancers, the fastest route is signing up with a payment processor like Square or PayPal, which lets you start accepting cards within minutes. If you process higher volumes, a dedicated merchant account gives you more control and potentially lower fees. Here’s how each option works and what it costs.
Choose a Payment Processor Type
There are two broad categories: third-party processors (also called payment service providers) and traditional merchant account providers. The right choice depends mostly on how much you process each month.
Third-party processors like Square, Stripe, and PayPal bundle you under their master merchant account. You sign up online with basic business information, and most accounts are approved instantly. This is ideal if you process less than $10,000 per month or just need to accept the occasional card payment. The tradeoff is that these providers handle disputes on your behalf but may have stricter policies, and they can occasionally freeze funds if they flag unusual activity.
Merchant account providers give you your own dedicated account for processing. You submit an application with more detailed business information, and approval typically takes a few days. These accounts offer more control over the dispute and chargeback process, and they often come with lower per-transaction fees at higher volumes. They make sense once your card revenue is consistently above $10,000 a month or if you operate in an industry with higher chargeback risk.
Understand Processing Fees
Credit card processing fees typically run 1.5% to 3.5% of each transaction. The exact amount depends on the pricing model your processor uses.
- Flat-rate pricing is the simplest. You pay a fixed percentage plus a small per-transaction fee on every sale. A common rate is 2.6% plus 10 cents for in-person transactions. Online and keyed-in transactions cost more, often around 2.9% plus 30 cents, because they carry higher fraud risk.
- Interchange-plus pricing passes the card network’s base fee (called interchange) through to you, then adds a consistent markup on top, such as 0.4% plus 8 cents. Your effective rate varies by card type, but this model is usually cheaper overall for businesses processing moderate to high volume.
- Subscription-based pricing charges a monthly fee for access to lower transaction rates. Some e-commerce platforms use this structure, with rates dropping as you move to higher-tier plans. For example, in-person rates might range from 2.4% to 2.6% plus 10 cents depending on your plan level, while online rates run from 2.5% to 2.9% plus 30 cents.
On a $100 sale at a flat rate of 2.6% plus 10 cents, you’d pay $2.70 in processing fees and keep $97.30. That cost is the price of accepting cards, and most businesses find the increase in sales more than covers it.
Accept Payments In Person
If you sell face to face, whether at a retail counter, a market booth, or a client’s home, you have several hardware options. The cheapest way to start is with a small card reader that plugs into or pairs with your phone. These readers accept chip cards and contactless payments like Apple Pay and Google Pay, and they typically cost under $50.
For a more polished setup, countertop terminals combine a card reader with a receipt printer in one device. Full register systems add a customer-facing screen. If you want zero hardware cost, some processors now offer Tap to Pay on iPhone and Tap to Pay on Android, which let your phone itself act as a card terminal. The customer simply taps their card or phone against yours at checkout.
Most mobile processing apps also store payments temporarily if you lose your internet connection, so you can keep selling during a Wi-Fi outage and the transactions sync once you’re back online.
Accept Payments Online or by Invoice
If your customers aren’t standing in front of you, there are three main ways to collect card payments remotely.
Digital invoices let you email a bill that your customer pays with a credit card or bank transfer by clicking a link. Most processors include invoicing in their standard tools. You create the invoice, add a description and amount, and send it. The customer enters their card details on a secure payment page, and the money lands in your account.
Online checkout works for e-commerce. If you sell through a website, you integrate a payment gateway that handles the card entry, authorization, and settlement behind the scenes. Platforms like Shopify, WooCommerce, and Squarespace have built-in payment processing, so the setup is mostly plug-and-play.
Virtual terminals let you key in a customer’s card number manually through a web browser or app. This is useful for phone orders or any situation where the customer reads you their card information. Keyed-in transactions carry the highest processing fees (typically that 2.9% plus 30 cents range) because there’s no physical card present to verify.
Using PayPal, Venmo, or Cash App
Peer-to-peer apps can work for accepting credit card payments, especially for freelancers or very small operations. PayPal charges about 2.9% plus a fixed fee when someone pays you with a debit or credit card. Venmo charges 3% for credit card payments. Payments from a bank account are free on both platforms.
Keep in mind these platforms have transaction limits. PayPal allows up to $60,000 in total transactions, with a $10,000 cap on any single payment. Venmo caps all transactions at roughly $7,000 over a rolling seven-day period, and until you complete identity verification, your limit is just $299.99 per transaction.
When you’re ready to move money to your bank, standard transfers are free but take one to five business days depending on the platform. Instant transfers cost 1.75%, capped at $25. These apps are convenient for occasional payments, but they lack the professional invoicing tools, reporting, and dispute management that dedicated processors provide. If accepting cards is a regular part of your business, a proper payment processor is worth the switch.
Keep Card Data Secure
Any business that processes credit card payments must follow the PCI Data Security Standard, a set of rules designed to protect cardholder data. The major card networks (Visa, Mastercard, American Express, Discover) all require compliance.
The good news is that if you use a third-party processor, the heavy lifting is handled for you. The processor stores and encrypts card data on their servers, so you never touch the sensitive numbers directly. Your main responsibilities are practical: use strong passwords on your payment accounts, keep your devices and software updated, don’t write down or store card numbers on paper or in spreadsheets, and train anyone on your team who handles payments to follow those same practices.
If you process cards through your own website or store card data yourself, your compliance obligations are significantly more involved. For most small businesses, the simplest path is to let your processor handle the card data entirely, which keeps you in the lowest compliance tier.
How Long Until You Get Paid
After a customer swipes, taps, or enters their card, the transaction goes through authorization (instant), then settlement (when funds actually move). Most processors deposit funds into your linked bank account within one to two business days. Some offer next-day or even same-day deposits, sometimes for an additional fee.
New accounts may experience longer hold times on initial transactions while the processor verifies your business. Once you’ve built a processing history, deposits typically settle on a predictable schedule. You can usually track every transaction, fee, and deposit through your processor’s dashboard or app in real time.