How to Accept Credit Card Payments

Credit cards steadily replaced cheques and cash as payment options. For many consumers, credit card payments are highly convenient for both online and offline purchases. Compared to cheques, credit cards have fast transactions. Accepting credit cards also gives a company a degree of legitimacy. Therefore, they have become integral to numerous businesses. Regardless of the industry, size of the venture, or experience, every enterprise should consider accepting credit cards. Reliable card payment solutions provide customers with multiple options to pay for goods and services. Hence, you should know what your business needs to accept credit cards. This guide covers a few fundamentals.

Accept in-person card payments – What do you need?

If your venture is based in a brick-and-mortar location, then you require in-person credit card processing. Businesses such as retail stores, restaurants, and hardware stores need point-of-sale (POS) systems. The system enables you to accept payments for goods and services. It processes and records transactions, as well. For physical payments, you have to set up hardware and software. You can get a credit card reader or a standalone card terminal. Depending on the machine, buyers might have to insert, swipe or tap their cards for payments. Some systems require customers to input their PINs for authorization.

Businesses can also accept credit card payments on mobile. This alternative is suitable for on-the-go services like food trucks, art fairs, and parties. An app like Square comes with an attachment that connects to your smartphone, facilitating card payment processing wherever you are. Your company also needs a merchant account to hold the funds from credit card payments. Merchant services typically offer full-stack payment processing solutions.

Accept online credit card payments

If you have an e-commerce website or your business operates online partially, then you have two options. Traditionally, a merchant account and payment gateway setup was the best choice for card payment services. An online payment gateway links the company website to the merchant account. For enterprises that accept large volumes of transactions, merchant accounts remain the most convenient option for credit card processing. A big downside is that you have to sign up for the merchant account and gateway separately.

However, for a new or small business, payment service providers, such as Square, PayPal, and Shopify are the best way to accept a credit card payment online. PSPs are easy to set up because they are all in one. They also cost less than the payment gateway-merchant account combo. A payment provider integrates with the website and its existing features, including shopping carts. With a PSP, you can log in and monitor your account.

What happens when a customer pays with a credit card?

A merchant should know the card payment procedure because it helps provide reliable services. The process begins with the buyer presenting a credit card. This request can be through a card swipe machine, a mobile card reader, or an online payment gateway.

As the merchant, you have to request the payment processor for authorization of the transaction.

Next, the payment processor submits the payment request to the relevant card association.

The request proceeds to the issuing bank, which has to verify elements like the CVV.

After approving or declining the request, the issuing bank sends the status to the card association, which then goes to the merchant bank and finally the merchant.

Transaction authorization takes seconds, while settlement and funding happen overnight. Therefore, merchants don’t have to wait too long for their money.

Things to consider before you start accepting card payments

You have realized that your business cannot operate without credit card payments, but how do you find the best solutions. Before you start comparing credit card processing companies, factor in several elements.

Weigh the pros and cons of PSPs vs merchant services to find a suitable solution to accept a credit card payment online. Consider your transaction volume and type of business. Some PSPs don’t cater to high-risk merchants, such as online dating, travel agencies, and bookmakers.

Merchants incur various fees to process credit card payments. The specific charges depend on whether you are using a merchant account or PSP. Some companies also impose charges depending on the type of card. Some fees, such as setup, can be negotiated, while others are compulsory. Thus, the applicable charges influence your card processing costs.

Learn your risk level as a merchant because it determines which processors to use and the cost of accepting credit cards. The risks associated with your enterprise also dictate the security measures necessary to offer safe card payments.


Accepting credit card payments is almost standard for today’s businesses. Card payments have become the most convenient way for consumers to pay online and offline. How you decide to accept credit cards depends on several aspects, including the type of business. For example, a credit card reader is a must-have for in-person transactions. Online and over-the-phone or card-not-present transactions are other alternatives available. Whether your business is online or offline, take the time to understand credit card processing adequately to find the best solutions.

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