How to accept credit card payments for small business

In 2025 and beyond accepting credit card payments for small business is no longer optional, it’s essential for happy customers and growing your bottom line. 

Customers expect the convenience of using credit and debit cards everywhere they shop. Businesses that fail to accept credit cards are fighting an uphill battle when it comes to growing their company.

Some benefits of accepting credit card payments:

• Increased sales, as customers tend to spend 160% more per transaction when paying with cards!
• Convenience for customers, leading to repeat business
• Credibility, because card acceptance is seen as more professional

The problem is most business owners don’t have the time to choose the best solution and usually go with the first one they find.

You can accept payments with traditional merchant accounts to modern payment service providers.

In this article I’ll explain exactly how you can choose the best setup for any business…whether you’re an entrepreneur or agent looking to sign up accounts for merchant services.

But first, we have to understand the basics.

Understanding Credit Card Processing Basics

To accept credit card payments The key players involved in each transaction are:

• Merchants – Business owners who accept credit cards.
• Payment processors – Companies like Square, Fiserv, Stripe, which handle transaction approvals and settlements.
• Issuing banks – Banks that issue credit and debit cards to consumers.
• Acquiring banks – Financial institutions that process transactions for merchants.
• Credit card networks – Companies like Visa, Mastercard, American Express, and Discover that facilitate payments.

When you’re looking to accept card payments for a small business these are the types of fees to expect:

1. Interchange Fees: These are set by credit card networks (Visa, Mastercard, etc.) and paid to the bank that issued the customer’s card. This fee has a percentage + fixed rate.

For example, a customer uses a Visa debit card to buy a $100 product in-store. The merchant pays:

0.80% of $100 = $0.80

Fixed fee = $0.15

Total interchange fee: $0.95

2. Assessment Fees: Charged by card networks (VISA, Mastercard Discover etc) for using their infrastructure. These are typically a percentage per transaction.

Visa → 0.14% per transaction

Mastercard → 0.13% per transaction

Discover → 0.13% per transaction

American Express → 0.15% per transaction

3. Payment Processor Fees: A markup fee charged by payment processors (stripe, Paypal, etc) for handling transactions and deposits. This can be flat-rate, interchange plus or tiered.

For a more in-depth walkthrough of these credit card fees, you can check out my other article titled How much do Credit Card Companies Charge Merchants.

When accepting card payments as as small business you need to know these terms:

• Payment gateway: A software that securely transmits transaction data (Authorize.net, Stripe, Paypal etc)
• Merchant account – A special type of bank account that holds credit card payments before they are transferred to a business bank account. Funds typically transfer into the business bank account after 24-48 hours
• Terminals and Point-of-sale (POS) systems—Terminals are handheld devices with more basic features. Point-of-sale systems have bigger displays and more capabilities that can accommodate more complex operations.

Evaluating Your Business Needs

For a small business looking to accept credit card payments…there are only 4 things you need to know in order to choose the right equipment and setup:

• Sales Volume and Transaction size: High-volume businesses and high transaction sizes benefit more from interchange-plus pricing rather than flat-rate pricing.

If your business fits these criteria:

• $10,000-15,000+ per month
• $50-100+ average transaction sizes 

Interchange pricing is usually more cost-effective.

• Transaction Types: If you sell in person, you’ll need a credit card terminal or POS system; online sales require a payment gateway.

• Industry Considerations: Some industries (e.g., high-risk businesses) face higher fees or need specialized solutions.

This means industries like tobacco, gambling, firearms, adult entertainment, credit repair or online dating businesses will face higher fees across the board.

• Budget: Factor in processing fees, equipment costs, and monthly service fees.

Equipment can range from $300 to $4,000+, depending on what you’re ordering. So, it’s essential to figure out the essential features you need for your business without getting something you don’t need.

Which brings me to the different ways you can accept credit cards as small businesses

Types of Credit Card Processing Solutions

1. Traditional Merchant Accounts: These specialized bank accounts allow businesses to accept payments directly.

Best for a small business with:

• Consistent revenue 20,000+/mo
• High volume of transactions (500+)

2. Payment Service Providers (PSPs) (Square, PayPal, Stripe)

You don’t need a traditional merchant account and are charged a flat rate per transaction.

This is ideal for small businesses with lower transaction volumes (<$10,000/mo)

3. POS (Point of Sales) Systems:

These are physical systems with touchscreens, barcode scanners, cash drawers, and receipt paper. It’s best for brick and mortar stores  — brands that offer this include Clover, Square, etc.

4. Mobile Payment Solutions: 

These are smartphones, tables, or portable card readers that allow you to accept credit and debit cards.

5. E-commerce Platforms:

E-commerce platforms like Shopify Payments, WooCommerce and BigCommerce allow you to take card payments directly. These platforms typically use third-party gateways like Stripe, Paypal, Authorize.net to process payments.

When it comes to choosing the right setup for you…

I’ll break it down step by step in an easy to understand format below.

Step-by-Step Guide to Setting Up Credit Card Processing

You can choose the best solution for a small business by following these 5 steps:

1. Research: Compare fees, contracts, and service options. Below is a guide with some popular options and if they are ideal for a small business making over or under $10,000 per month.
2. Compare Fee Structures: Look at flat-rate, interchange-plus, and subscription models.

For a complete look at these different rates in depth…check out my other article How Much Do Credit Card Companies Charge Merchants.

3. Apply for an Account: Payment Service Processors (PSPs like Stripe, Paypal etc) are quick to approve, while merchant account applications take longer.

4. Select Hardware: Choose from mobile readers, POS terminals, and virtual terminals.

What you choose here depends on what you need, which I will explain below.

5. Test the System: Test transactions to ensure smooth processing.

Once you have the hardware and software set up…always test transactions to avoid angry customers and other headaches.

Payment Hardware Options — Choosing the right equipment

Here’s a table breaking down the different hardware and which type of business they fit best below:

Online Payment Integration

For online businesses, a payment gateway is essential. A few things you will a couple of options to consider:

• Shopify, WooCommerce, and Magento have their own website options. They typically use third party payment processors like Stripe, Paypal.
• Direct payment gateways — Authorize.net, Braintree etc

The benefits and drawbacks of using each are below so you can make the decision that makes the most sense:

A few other things you’ll need in place…

• Shopping Cart integration: Whatever you choose has to flow smoothly with the customer experience

• Security: Use SSL certificates and meet PCI DSS compliance requirements.

If you use third-party payment processors (like Stripe, PayPal, or Shopify, Woocommerce Payments), they handle PCI compliance for you. 

If you use direct payment gateways and store or process credit card data on your servers, you must meet all PCI DSS requirements yourself. 

Managing Costs and Fees

Nobody likes overpaying. So to save as much as you can on credit card processing costs, it’s essential to all these steps:

• Negotiate Rates: Larger businesses can negotiate lower payment processor fees.

Your negotiating power is tied directly to your transaction volume and sales.

To make this easy to execute…here’s a table to show how much leverage you have over most processors based on your monthly revenue:

The fees you can negotiate are below:

Processor Markup: If using interchange-plus pricing, you can negotiate the markup percentage.

Monthly Fees: Some providers charge $10 – $50/month, but high-volume businesses can reduce or waive this.

Chargeback Fees: Standard $25 – $100 per dispute can sometimes be reduced.

Early Termination Fees (ETFs): If locked into a contract, you can negotiate lower or no ETF penalties.

• Avoid Hidden Fees: Read contracts carefully.

A list of bogus ‘hidden’ fees include:

1️⃣ Compliance & Account Maintenance Fees

• PCI Compliance Fee
• PCI Non-Compliance Fee requirements
• Annual Fees – Charged for general account maintenance 
• IRS Reporting Fee 
• Statement Fees

2️⃣ Processing & Transaction Fees

• Monthly Minimum Fee 
• Batch Processing Fee 
• Non-Qualified Transaction Fee
• Gateway Fees
• Address Verification Service (AVS) Fee 

3️⃣ Chargebacks & Dispute Fees

• Chargeback Fee
• Retrieval Fee
• Excessive Chargeback Fee

4️⃣ Contract & Termination Fees

• Early Termination Fee (ETF) 
• Liquidated Damages Fee

You can avoid these ‘hidden’ fees by following this rules of thumb:

✅ Choose transparent pricing. Opt for flat-rate or interchange-plus pricing (e.g., Stripe, Helcim, Square).

✅ Read the contract carefully. Ask about early termination, monthly, and processing fees.

✅ Use chargeback prevention tools. Reduce chargeback fees with fraud detection.

✅ Negotiate. iIf processing $20K+ per month, request waivers on monthly fees.

• Consider Cash Discount Programs: Encourage customers to pay with cash.

By passing down the transaction fee onto the customer in the form of a cash discount, you can eliminate 80-100% of your total credit card fees legally!

This is how over 1000 people inside the Cashswipe family are helping businesses save hundreds to thousands of dollars every single month.

For example:

Let’s say you go to a candy store and buy a chocolate bar. The cashier tells you:

• If you pay with cash, it costs $1.00. ✅
• If you pay with a card, it costs $1.05. ❌

Instead of losing money, the business gives a small discount to cash customers.

• Take Advantage of Volume Discounts: Some processors offer better rates for high sales volumes.

Security and Compliance Considerations

To protect your business and customers you should also have:

1. PCI DSS Compliance: Follow industry security standards to protect payment data.
2. Fraud Prevention: Use encryption and CVV verification.
3. Data Protection: Secure sensitive customer information.
4. EMV Chip Technology & Contactless Payments: Reduce fraud risk with modern payment methods.

Conclusion

Knowing how to accept credit card payments for a small business is essential for maximizing your bottom line. 

Whether you choose a merchant account, a payment service provider, or a combination of both, selecting the right payment processing solution can help you maximize sales, improve customer satisfaction and keep costs low.

Next Steps:

• Compare credit card processors based on your business model.
• Evaluate security and compliance requirements.
• Implement your chosen solution and start accepting payments.

If you’d like a way to eliminate 80-100% of your fees and save hundreds, if not thousands monthly (or you want to provide this to business owners)…

Cash Swipe is a one-stop shop that will give you everything you need in order to do this.

We provide terminals, POS systems, sales training and an entire community of like minded entrepreneurs who are helping small businesses save on their monthly fees…while making healthy residuals along the way.

In 2025 our top 10 agents make anywhere from $30,000-$120,000+ per year in passive income just by placing terminals with the ‘cash discount’ program inside local businesses.

If you’re looking for a way to provide massive VALUE to your local community, partner with me and have assets like credit card machines working for you…

You can book a partnership interview with my team below. We’ll go over the startup costs and options available to you:

Book your partnership interview to help local businesses save on fees while making residuals.

And if you want to do more due diligence…

I have a free Facebook community (with over 40,000 members) where you can ask me questions directly on weekly LIVE training about this entire business and how it works.

Get free resources and training inside Credit Card Processing For Beginners on Facebook.