How to Accept Credit Card Payments as a Small Business | Bankrate

The reign of cash as king is coming to an end. today ’ randomness consumers use non-cash payment methods for 74 percentage of transactions, according to a 2020 Federal Reserve sketch. today ’ south best credit cards offer enhance security features, generous spend limits and rewards. Plus, with the emanation of on-line shopping, credit cards are more popular than ever. In fact, credit tease transactions account for 29 percentage of all transactions, according to the learn. We ’ ve created this guide to help small-business owners and side bunco entrepreneurs weigh their credit card process options. here ’ s what you need to know :

How to accept credit card payments

1. Find a credit card processing provider for your small business

There are many payment processing providers that offer similar services.

Consider what part of citation batting order transactions you will process in person, on-line and over the phone. besides, think about what type of credit cards you ’ ll take : Visa, Mastercard, Discover, American Express and so on. Processing fees vary between transaction types and card networks. It ’ s in your best sake to find the supplier that offers the most competitive fees for the type of transactions and credit cards that you ’ ll be processing the most. You should besides consider the volume of transactions your business will be march, as some providers offer better rates for processing more transactions. If you run an online-only commercial enterprise, make sure the requital central processing unit you choose integrates easily with your web site. For brick-and-mortar businesses, research what hardware you ’ ll indigence to purchase—like requital terminals—to see if they ’ ll be compatible with your current decimal point of sale ( POS ) system. Starting the research process can be overwhelm. We ’ ve recommended some of the best and cheapest ways to accept credit cards for small businesses later in this steer to help you get started .

2. Open a merchant account

After choosing your citation menu processor, create a merchant services account with them. While you may already be using popular providers like PayPal for personal transactions, you ’ ll need to establish a separate business score to enable your company to accept citation circuit board payments. Creating a merchant account typically involves providing some information about your business and setting up a joining with your occupation ’ s deposit account where money will be deposited .

3. Set up payment terminals

The final thing you have to do to accept citation card payments is set up requital terminals across your business. If you have a brick-and-mortar shop, this step involves ordering and setting up hardware, like a card lector and a POS, if you don ’ t have one already. There are many poster readers on the market : ones that let you accept payments via a swipe, an tuck bit or a contactless tap. If you do any sales online, you ’ ll need to set up on-line payments. If you ’ re using an e-commerce platform like Shopify, their payments portal will come with their e-commerce platform. If you ’ ve built your own web site, you may need technical support from your circuit board work supplier or website developer to add credit card work for small business on your web site. Don ’ thymine forget to look for training resources from the payments processing supplier to understand how to make the most of your hardware and software .

Accepting credit cards in person, online and over the phone

There are three main paths to “ we accept credit cards ! ” Businesses can choose to accept credit card payments in person, on-line and over the phone. These methods come with their own engineering needs and incur different fees .

In-person payments

In-person credit card process is utilitarian for brick-and-mortar retailers, on-site service providers ( like plumbers ) and mobile commercial enterprise merchants ( like food trucks or farmers ’ market vendors ). These transactions involve the customer presenting the calling card to make a buy. Because the cardholder and card are portray for these types of transactions, they pose a lower risk of fraud, so in-person transactions typically have lower fees than the other types of transactions. You ’ ll need a batting order reader and a POS system to process credit card payments in person .

Online payments

E-commerce shops, restaurants that accept orders online and companies that provide digital services are examples of businesses that rely on on-line credit carding serve. Online transactions typically have higher process fees than in-person transactions. If you want to accept on-line citation card payments you ’ ll need a digital shopfront, such as an e-commerce memory or web site, and a requital gateway.

Over-the-phone payments

Card-not-present transactions typically take place over the phone and are normally used by restaurants to pay for takeout orders. This process involves the customer sharing their citation card number with the merchant, and the merchant manually entering that information into their poster proofreader. These types of transactions typically incur the highest processing fees because they pose the greatest risk for imposter. In arrange to process credit poster payments over the earphone, you ’ ll need a citation tease reader and a POS or an on-line payments gateway .

Credit card processing fees for small business

Credit batting order processing providers charge fees for the services they provide, like conducting fraud checks and verifying with the cardholder ’ s bank that funds are available. The requital terminal conducts these critical security measures in fair a few seconds vitamin a soon as a customer swipes, taps or dips their credit circuit board. so, what ’ s the average tip for credit tease work for little businesses ? There are normally no monthly fees for credit poster process. rather, most providers charge fees per transaction. While fees vary based on the type of batting order ( Visa, Mastercard, American Express or others ) and processing supplier ( such as PayPal, Stripe, Square ), they typically range from 1.5 percentage to 3.5 percentage per transaction. American Express tends to charge higher fees than its competitors, which is why some businesses don ’ metric ton accept Amex cards .

Average credit card network processing fees

Credit card network Processing fee range
American Express 2.5 percent to 3.5 percent
Discover 1.56 percent to 2.3 percent
Mastercard 1.55 percent to 2.6 percent
Visa 1.43 percent to 2.4 percent

The best way to accept credit cards for small business

As a grok merchant, you ’ re probably looking for the best and cheapest way to accept credit cards. The bad newsworthiness is, there is no one-size-fits-all solution. here ’ s the good news program : if you weigh your business ’ mho needs—like the bulk of transactions and where these transactions take place—you should be able to narrow your search down to several providers that offer commodious solutions at favorable rates. To help you get started, we ’ ve compared five of the most popular credit tease process providers for small businesses. ( Note the fees below are all based on transactions in USD. Rates vary by currency. )

PayPal

Best for in-person retail

While PayPal began as a way to send money to friends and family on-line, the company now offers assorted merchant solutions for processing credit rating cards both on-line and in person .

Pros

  • PayPal is a widely trusted name that can help build confidence with your customers.
  • Transaction fees are competitive with other providers.
  • Many different options for processing credit cards, including PayPal Checkout for online payments, the PayPal Here point of sale system and PayPal Invoicing for billing for services.

Cons

  • PayPal’s extensive offerings can make it difficult to decipher the differences and choose the one that works best for your business.
  • Many account services, including chargeback protection, account monitoring and recurring billing, require additional fees.

Fees

PayPal charges the following process fees for recognition menu payments :

  • In-person transactions: 2.7 percent + $0.30 (e.g. $25 transaction = $0.98 fee)
  • Online transactions: 2.9 percent + $0.30 (e.g. $25 transaction = $1.03 fee)

Shopify

Best for e-commerce

Shopify is an e-commerce platform that helps businesses sell products on-line. With Shopify Payments, they besides support in-person and online recognition card payments .

Pros

  • Built to be used with Shopify’s signature e-commerce platform.
  • Offers competitive fees for processing credit cards.
  • Charges the same fee to process card-not-present transactions as it does online payments.

Cons

  • You need to have a website through Shopify to access their payment processor.
  • You’ll have to pay a monthly fee for the platform on top of regular credit card transaction fees.

Fees

The most basic Shopify design costs $ 9 per month and delivers credit card payment work, invoicing capabilities and the ability to turn your non-Shopify web site into an e-commerce chopine. If you want more robust e-commerce capabilities, you ’ ll need to pay $ 29+ per month for a different Shopify plan. Shopify charges the following process fees for credit tease payments :

  • In-person transactions: 2.7 percent (e.g. $25 transaction = $0.68 fee)
  • Online transactions: 2.9 percent + $0.30 (e.g. $25 transaction = $1.03 fee)
  • Card-not-present transactions: 2.9 percent + $0.30 (e.g. $25 transaction = $1.03 fee)

Square Payments

Best for mobile businesses

Square is known for its innovative, petite tease reader that can be attached to smartphones, turning any device into a payment concluding. Thanks to its compact hardware offerings, Square is capital for mobile businesses like food trucks, marketplace vendors or in-home service providers like plumbers .

Pros

  • Square is a leader in smartphone credit card reader hardware.
  • Its mobile card reader is typically offered to its merchants for free.
  • The card reader can work offline, so you can accept credit card payments in places without a reliable Wi-Fi connection.
  • Contactless payment solutions are also available.

Cons

  • High fees for in-person transactions.

Fees

Square charges the following march fees for credit card payments :

  • In-person transactions: 2.6 percent + $0.10 (e.g. $25 transaction = $0.75 fee)
  • Online transactions: 2.9 percent + $0.30 (e.g. $25 transaction = $1.03 fee)
  • Card-not-present transactions: 3.5 percent + $0.15 (e.g. $25 transaction = $1.03 fee)

Stripe

Best for online businesses that want to scale

Stripe was built with on-line businesses in mind and offers sophisticate payment process solutions that can scale as your company grows. Stripe ’ s robust API helps you well integrate its requital chopine with other software solutions in your technical school batch, like report and customer relationship management software .

Pros

  • Competitive rates for processing online credit card transactions.
  • The API gives you options to customize the software to your needs.
  • A variety of financial solutions, including invoice processing, make it ideal for businesses with their sights set on growth.

Cons

  • In-person transaction fees are more costly than those of other providers, making it a bad choice for brick-and-mortar retail.
  • The base solution doesn’t support card-not-present transactions, so you’ll need special permission to set up that capability.

Fees

Stripe charges the following serve fees for credit card payments :

  • In-person transactions: 2.7 percent + $0.05 (e.g. $25 transaction = $0.73 fee)
  • Online transactions: 2.9 percent + $0.30 (e.g. $25 transaction = $1.03 fee)

Venmo

Best for online-only businesses

Venmo is known for its condom, fluid money transferring service. While Venmo chiefly works by transferring money between trust accounts, it ’ sulfur unrolling credit circuit board processing solutions.

In rate to accept credit card payments via Venmo, you ’ ll have to link your Venmo for Business account to Braintree or PayPal. then, customers will be able to use the Venmo app to make payments through the credit cards linked to their accounts .

Pros

  • Venmo is a familiar and convenient payment method for customers.
  • No additional setup fees.
  • Free standard transfers from your Venmo account to your bank account (usually takes one to three business days).

Cons

  • Not yet available for in-person payments. (That said, customers can pay through the app while in your store.)
  • Fee for instantly transferring money from your Venmo account.

Fees

Venmo charges the following serve fees for credit card payments via Braintree :

  • Online transactions: 2.9 percent + $0.30 (e.g. $25 transaction = $1.03 fee)
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