How To: Accept Credit Card Payments

by: | ChooseWhat.com

If you want to accept credit card payments in person or online, then your business must have a merchant account.

A merchant account is the financial account that allows businesses to accept debit or credit card payments from customers and clients. Merchant accounts employ various credit card processing systems so you can access the information contained on credit cards.

For our purposes, we’ll focus on three merchant account/credit card processing systems:

  • Point of Sale (POS) Credit Card Machines
  • Mobile Credit Card Apps
  • Online Payment Terminals

According to some estimates, consumers now use credit cards in over 80% of all retail transactions and nearly all online purchases. Whether your business is strictly web-based, face-to-face, or a combination of the two, there is a credit card processing service that will benefit your company.


Before you set up a merchant account and accept credit card payments, you should:


Which Credit Card Processing System is right for you?

The type of credit card processing system you should choose depends on your type of business. These are our recommended options based on your business:

  1. Your customers make payments at stationary locations.

    >> Point of Sale (POS) Credit Card Machines: Hardware that can be used along with cash registers to read credit cards.

  2. Your customers make payments at mobile locations.

    >> Mobile Credit Card Swipe Apps: Applications for your smartphone that let you swipe cards and/or directly enter the credit card information.

  3. Your customers make payments online.

    >> Online Payment Terminals: A website where you or your customers can manually enter credit card information.


Point of Sale (POS) Credit Card MachinesHot to Get a Merchant Account

National Providers

The most prominent national credit card processing services offer more versatility for a merchant account than any other option on the market. A large, national service is the best way to ensure that all of your bases are covered --  especially if you need to accept payment using various methods, or if you expect your forms of payment to evolve over time.

Top Providers:  Merchant Warehouse, Flagship Merchant Services, National Bankcard

  • Fee rates are predetermined and rigid, average between 1.6% to 2.2%, depending on the provider
  • Offer many different options, including mobile terminals, smartphone applications and online payment websites
  • 24/7 customer support

Local Providers

Most cities have locally-based credit card processing providers that offer more hands-on attention to your business account than those offered by large, national services.  These providers usually include local banks and specialized merchant processing services that can be found easily through a local search (i.e. "Austin, Texas Credit Card Processing") in a search engine such as Google.

  • Rates are generally flexible, depending on your business setup or how you’d like to pay
  • Fast turnaround for broken machines (Local Austin companies guarantee 4-hour replacement windows)
  • Physical locations allow you to have face-to-face meetings with staff
  • Offer multiple options for mobile terminals and online payment websites
  • Customer support times depend on the processing company (However, many we found are available 24/7)

Tip:  The mobile card reader hardware from Point of Sale credit card terminal providers are much more expensive ($120-$200) than the free mobile apps provided by Intuit GoPayment and Square. But, this price can be worth the cost if you need both mobile and stationary card readers, since all transactions would be serviced by the same company and viewable in the same online account summary.


Mobile Credit Card Swipe Apps

Accept Credit Cards from Mobile PhoneBecause they're so inexpensive, mobile credit card swipe apps have become popular with both brick-and-mortar and mobile businesses. Here are a couple of the most popular credit card swipe apps for smartphones, iPads, and Android tablets. Search the app store on your mobile device to find and install the following apps. Both are free to download.

Intuit GoPayment

Available for Apple iOS, Google Android, and Blackberry smartphones and tablets.

  • 30-day free trial (Special offer through our link; above)
  • Free credit card reader; free app
  • No start-up costs, long-term contracts, or cancellation fees
  • Flat fee rate of about 1.7% for swiped cards, or 2.7% for keyed-in cards
  • Interactive menu order screens are available through iPhone, iPad, and Android tablet apps
  • PCI compliant and encrypted reader ensures your customers' data is safe
  • Integrates directly into QuickBooks bookkeeping software
  • Can combine this account with Intuit’s online payment terminals
  • 24/7/365 phone support, chat, email and FAQs

 
 Square

Available for Apple iOS and Google Android smartphones and tablets.

  • Free credit card reader; free app
  • No start-up costs, long-term contracts, or cancellation fees
  • Flat fee rate of about 2.75% for swiped cards, or 3.5% + $0.15 per keyed-in card
  • Interactive menu order screens are available through the iPad app
  • PCI compliant and encrypted reader ensures your customers' data is safe
  • Customer support via email and FAQs only (no live phone or chat support)

Online Payment Terminals

If you do business primarily through your website, then you can easily set up a merchant account through PayPal, Google Checkout, or Amazon. These are the most popular online payment terminals that accept credit card payments. They each have different fee structures, features, and support options.

Tip:  A website builder service can give you e-commerce and payment processing tools to accept payments through PayPal, Google Checkout, or Amazon. If you want to learn more about how to build a website to start selling online, visit our guide on How To: Build a Website.

PayPalPayPal Payments Online

  • Fee rate ranges from 2.2% to 2.9% + $0.30 per transaction (This rate decreases as sales increase.)
  • Non-profits are charged a discounted rate of 1.9% to 2.2% + $0.30 per transactions
  • Additional 1% fee for international transactions and a 2.5% charge for currency conversion
  • Highly secure checkout that uses the Secure Sockets Layer protocol with a 128-bit encryption
  • 24/7/365 phone customer support

Google Checkout

  • Fee rate ranges from 1.9% to 2.9% + $0.30 per transaction (This rate decreases as sales increase.)
  • Optional fee structure of  5% + $0.05 per transaction if your most of your sales are less than $10 
  • Additional 1% fee for international transactions
  • Extensive API developer guide lets you customize the virtual terminal to fit any website
  • Highly secure checkout that uses the Secure Sockets Layer protocol with a 128-bit encryption
  • Email customer support only

Amazon Payments

  • Fee rate ranges from 1.9% to 2.9% + $0.30 per transaction (This rate decreases as sales increase.)
  • Set fee of 5.0% + $0.05 per transaction for all transactions under $10
  • Additional 1% fee for international transactions
  • Third-party API software lets you import Amazon Payments data into QuickBooks
  • Highly secure checkout that uses the Secure Sockets Layer protocol with a 128-bit encryption
  • 24/7/365 phone customer support

Friendly Tips

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  • Keep a manual credit card imprinter (also known as a “knuckle buster”) on hand in case your Internet or power goes out, so that you can still record all necessary credit card information easily.
  • If you choose a local merchant account service, be sure to check its Better Business Bureau score along with other Internet rankings from Yelp and Google.

Fair Warnings


  • Chargebacks for fraudulent or erroneous purchases will usually incur a $20 fee. Most services will let you dispute chargebacks and reclaim this fee if you have sufficient documentation of the transaction.