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3 easy ways for small businesses to accept credit cards

Accepting credit card payments for your small business is easy with these three easy steps.

Are you starting a small business? The good news is that there's never been a better time to start your own business. The bad news, of course, is that there's a lot of work and planning that goes into it.

One of the things you'll have to plan for when starting your own business is how your customers will pay you. Sure, cash might be the simplest payment method. But it's not the most popular. In fact, a 2019 Federal Reserve study found that only a small percentage of payments today are made with cash, and about 34% are made with credit cards.

It's definitely in your best interests to accept credit cards for your small business. To help you get started, we've broken the process of accepting credit cards down into three simple steps and have shared the three best payment processors to use.

How to accept credit cards for your small business

Accepting credit cards for your small business isn't difficult, but like many parts of starting a business, it can feel overwhelming when you're just getting started. 

We've broken the process down into just 3 steps you can start today.

Step 1: Decide how you'll accept payments

First, decide how you will accept credit card payments. The primary options are:

  • In-person payments

  • Online payments

  • Mobile payments

Depending on the type of business you run, it might be quite clear what type of payments you'll accept. For example, if you provide online services, chances are you'll be accepting solely online payments.

For other types of businesses, you might need a combination of payment methods. For example, maybe you run an online e-commerce site where you sell crafts but also sell them in-person at craft fairs. In that case, you would probably need both online and mobile payments. On the other hand, a new restaurant might need to accept primarily in-person payments but also allow for online payments for to-go orders.

You know your business best, and only you can decide how you'll need to accept payments.

Step 2: Choose your payment processor

It used to be that to accept credit card payments for your small business; you would need a merchant account. Your merchant account would provide payment processing, point of sale systems, and credit card terminals.

And while merchant accounts are still an option, they often require high fees and lengthy contracts. And thanks to technology, there are plenty of other simpler and more affordable options available today.

A payment processor or payment service provider provides a similar service as a merchant service without opening your own account. They allow for credit card processing and can provide any hardware you need without the costs and complications of a merchant account.

Once you know how you'll accept payments, it's time to choose a payment processor. There are plenty of payment service providers to choose from, and it can be difficult to decide which one is best.

Step 3: Get the right hardware and software

Depending on the type of business you run, you might need to have hardware or software in place. If you run an entirely online business, you'll need to set up your payment gateway on your business's website.

For businesses accepting in-person and mobile payments, you'll need actual hardware. Some payment processors provide you with the point of sale equipment you'll need to accept payments in person.

What are the best payment service providers?

Many payment service providers choose from, but a few really shine as being the most popular with small businesses.


A name that everyone recognizes


PayPal is a name that everyone recognizes, and for good reasons. It's one of the top online payment processors, making it easy for small businesses to accept both in-person and online credit card payments.

First, PayPal accepts credit card readers that you can keep at your place of business or take with you on the go. Another option for in-person payments is a QR code, which your customer scans. This contactless payment method allows the customer to pay from their phone. Finally, PayPal provides payment processing for entirely online transactions.

PayPal has recently updated its fees, and the new pricing will be in effect on August 2, 2021. As of that date, the fees will be as follows:

  • Digital PayPal payments: 3.49% + $0.49 per transaction
  • Online credit card payments: 2.59% + $0.49 per transaction
  • In-person QR code payments: 1.90% + $0.10 per transaction
  • In-person credit card payments: 2.29% + $0.09 per transaction


A favorite for in-person and online businesses alike


Square is another of the top credit card processors and has become a favorite for in-person and online businesses alike. When you sign up for Square, you can easily set up online payments on your website. Square also provides the hardware you need to accept payments at your place of business or on the go. Square also makes it easy to send invoices, which send the payer directly to a payment page.

Square's fees are as follows:

  • Card-present in-person payments: 2.5% + $0.10 per transaction.
  • Card-not-present in-person payments: 3.5% +$0.15 per transaction.
  • Online payments: 2.9% + $0.30 per transaction.


Well-known for its online payment processing


Stripe is another great option for companies that need to accept credit card payments. First, Stripe is well-known for its online payment processing. You can easily create a checkout process on your website and collect payment information. You can accept multiple currencies, with more than 135 available.

For small businesses that send monthly invoices, you can also set up recurring subscriptions and billing for credit card payments. Finally, Stripe provides Stripe Terminal, a point-of-sale device you can use to collect credit card payments, Google Pay, Apple Pay, and more.

Stripes fees are as follows:

  • Online credit card payments: 2.9% + $0.30 per transaction.
  • In-person credit card payments: 2.7% + $0.05 per transaction.

Is it necessary to accept credit cards for my small business?

It's not required that your small business accept credit cards, but you may miss out on business if you choose not to. Many consumers today choose to use credit cards to pay for goods and services.

How do I start accepting credit cards for my small business?

To accept credit cards for your small business, start by deciding what type of payments you'll need to accept: in-person, mobile, or online. Once you know that, you can research the best payment processors for your needs.

What is the best payment service provider for small businesses?

No one best payment processor outshines the rest, but three of the most popular are PayPal, Square, and Stripe. You'll have to evaluate each one to determine which one best meets your needs.

What is the cheapest way for small businesses to accept credit card payments?

The cheapest way to accept credit card payments depends partially on whether you'll be accepting payments in-person or online. Payment service providers generally have different fees for different types of payments.