Swipe, Tap, Done: How to Take Credit Card Payments as a Small Business 

It’s no secret that today, buyers love credit and debit cards.  

Year-over-year, the use of credit cards in purchases continues to increase. Why? Because cards present unmatched flexibility, simplicity, and convenience at checkout. 

Despite their popularity, many business owners are still reluctant to add credit card processing. 

In this article, we’ll look at why your business should start accepting card payments. We’ll discuss the various types of card payments and how to process credit card payments.  

Finally, we’ll wrap up with strategies for choosing the right payment processor for your business.  

FROM ONE OF OUR PARTNERS — What Is Payment Processing? 

Why Accepting Credit Cards Is a Game Changer for Small Businesses 

So, why credit cards? 

Let’s look at five convincing reasons why you should start accepting credit card payments. 

Credit Cards Are Popular and Widely Accepted 

Over 80% of US adults have at least one credit card. On average, there are 3.73 credit cards for every person in the US. That’s a lot of credit cards. We’re talking over 942 million cards in circulation, and those are just the major brands. 

Across the Atlantic, the European Central Bank reports that in 2024 “card payments accounted for 56% of the total number of transactions”. While in the UK, approximately 11.6 million credit card transactions are precess every day.  

Given their sheer numbers, it shouldn’t be surprising that credit cards are popular at checkout, too. According to the latest figures from the US Federal Reserve, credit cards are used in 32% of all payments. This makes credit cards the most preferred payment method. 

Clearly, credit cards are now a staple in payments. Don’t get left behind; join this unstoppable payment trend. 

You Get Paid Faster 

Credit card payments are processed instantly. The transaction gets confirmed as soon as the customer taps or swipes their card. Transfer speeds of funds do vary by provider. However, you won’t be waiting for a check in the mail or making yet another bank trip to deposit cash.  

Fast payments help keep your cash flow in the green. By eliminating delays and uncertainties, card payments ensure that money is always available right at the point of sale. 

Accepting Credit Cards Conveys Credibility 

Customers trust their credit card brands, and that trust inherently transfers to the merchants that accept this form of payment. Simply displaying credit card logos at the point of sale is enough to increase your business’s credibility and legitimacy. 

The main reason for this is security. Credit cards are possibly the most secure payment method, whether shopping online or in person. Naturally, customers see businesses that accept credit cards as safe and trustworthy as well. 

Card Transactions Simplify Bookkeeping 

It’s so much easier to log, track, and even automate credit card transactions than any other form of payment. The payment system records and organizes these transactions neatly for you. That means no tedious and erroneous manual entries. 

You can even integrate your credit card payment processor with your in-house accounting system. By doing that, you can get detailed financial reports and analytics at any time. 

Credit Card Payments Increase Your Bottom Line 

Multiple studies suggest that customers spend more when paying with credit cards. The general consensus is that credit cards abstract money from transactions. The customer does not feel like they’re spending “real” money when putting charges on a credit card. 

While that’s a debatable consumer behavior, it’s good news for entrepreneurs. 

Additionally, accepting credit cards opens your business to more buyers. And obviously, the more buyers, the higher the sales and profits. 

One study found that 73% of customers will leave without purchasing anything if denied card payment options. The researchers estimate that, globally, businesses lose 11.8 million customers this way. 

Understanding Your Credit Card Payment Options 

Credit cards are a versatile and flexible payment method. You can get paid in a number of ways, including: 

In-person payments 

This is the most straightforward way to get paid using credit cards. Your customer can use either a physical card or their mobile wallet (cards saved to their mobile device).  

The cardholder simply swipes, inserts, or taps their card on a stationary or mobile card reader, and that’s it.  

Today, most credit cards have Near-Field Communication (NFC) chips that allow for Tap to Pay (contactless payments)—simply tapping or waving the card over the reader does the trick.  

Even better, you may not need to purchase a card reader if you accept Tap to Pay. Some payments tools enable your smartphone or tablet to process NFC chips.  

In-person card payments are ideal for physical establishments such as stores and restaurants. They’re also great for contractors in field-based trades such as plumbing, construction, remodeling, and appliance repair. 

Online payments 

In this case, the customer pays on a website. Web-based card processors are commonplace in e-commerce. You can also have a payment page on your business website, even if you don’t trade online. 

Mobile apps 

Customers can pay using credit cards via mobile apps. The app could be your own or from a third-party payment provider. Mobile apps like PayPal, Stripe, and Venmo allow users to send money from their credit cards. 

Payment links 

A payment link is a secure URL that directs users to a payment platform where they can complete a transaction. The link could be embedded in an email button, QR code, or image. Each link can be customized to include a pre-defined invoice or bill. 

This is what you get with an invoicing app like Invoice Simple. By using Invoice Simple Payments, you can add customized QR codes to physical invoices and secure payment links on digital invoices. That way, you’re paid quickly and securely.  

RELATED ARTICLE — The Most Popular Mobile Payment Methods for Business Owners 

What You Need to Start Taking Card Payments 

Accepting credit card payments is pretty straightforward. Here’s everything you need to get started: 

• Business bank account: You’ll need a dedicated business bank account to receive funds from card payments. 

• Merchant account: According to Stripe, this is “a bank account that is specifically used for accepting customer payments, usually by credit card, debit card, or other electronic transfer.” The account holds funds from customers’ card payments before depositing them into your primary bank account. 

• Mobile device or POS system: In-person card payments require a physical credit card reader. Such a device can be portable or attached to a cash register at checkout. 

• Online payment page: If you want to offer an online payment experience, you’ll need a live payment page. The page will serve as a payment gateway. Again, this can still work for brick-and-mortar establishments. 

• Payment processor: A payment processor provides the technology and tools to facilitate card payments. They bridge the gap between your bank account and the customer’s credit card. 

• Basic info for setup: When signing up for a merchant account and payment processor, you must provide basic business information. The info includes contact details, license(s), and your Employer Identification Number (EIN). 

Choosing the Right Payment Processor 

You need a payment processor to receive credit card payments. Luckily, there are hundreds of service providers to choose from. However, not all payment processors are equal. 

The following are 8 key qualities to look for when choosing a payment processor for your small business: 

1. Easy to use and implement 

2. Reasonable, affordable, and transparent pricing 

3. 24/7 user support 

4. Seamless integration with third-party systems such as financial management software 

5. Ability to handle your transaction volume 

6. Secure and compliant 

7. Zero or low service cancellation fee 

8. Support for multiple types of cards and payment modes 

FROM ONE OF OUR PARTNERS — 7 Factors to Consider When Choosing an Online Credit Card Processor 

Weighing Different Payment Processors 

Compare multiple payment processors to find the right fit for your business. Consider all the factors we’ve mentioned above when vetting different processors. 

To help get the ball rolling, we’ve listed the top three payment processors for your consideration. 

Stripe

Stripe is a multinational payment provider offering a fully integrated suite of payment solutions. It’s widely known for its versatility, flexibility, and scalability. 

Local cards are processed at 2.9% + 30¢ per transaction. The pricing structure is highly segmented yet offers more flexibility as you go. 

Pros 

• Highly customizable 

• Supports multiple currencies and countries 

• Wide variety of payment options 

• Integrated with Invoice Simple Payments 

Cons 

• Can be complex for non-developers 

• No built-in POS system 

• Limited customer support

PayPal 

PayPal is a veteran in the payments industry. The platform is one of the earliest digital payment processors in the world. 

PayPal’s card processing solutions are often praised for being versatile and accommodating to most business sizes and models. Charges for processing credit cards start at 2.89 % + fixed fee based on the transaction type. 

Pros 

• Pay-as-you-go pricing with no monthly or annual subscription 

• Powerful fraud protection tools 

• Free POS software 

• Integrated with Invoice Simple Payments 

Cons 

• Complicated pricing structure 

• Higher fees than most processors 

• No 24/7 phone support 

Square 

Launched in 2009, Square has grown into a leading global brand in payment processing. It provides a customizable payment ecosystem designed for small businesses. 

Premium service prices start at $29/month. You also pay a processing fee for each transaction. The fees range between 2.6% + 15¢ for in-person payments and 3.5% + 15¢ for virtual payments. 

Pros 

• Wide range of features 

• Affordably priced hardware 

• Integrates with other payment processors 

Cons 

• Pricey for high-volume businesses 

• Limited POS functionality and customization 

• No discounts for high transaction volumes 

Consider a Unified Payment Solution 

Some payment processors integrate seamlessly with essential financial solutions like accounting, invoicing, and billing software. These are great because you can have a single unified platform that does all things payment-related. 

Take Invoice Simple, for instance; it helps you create and send professional invoices and quotes. The same platform also processes card payments powered by Stripe and PayPal. 

Imagine handling all billing processes on a single pane of glass. That’s the beauty of a unified payment solution. One platform takes care of everything, from serving estimates, calculating bills, preparing invoices, and tracking payments to generating receipts. 

Setting Up Your Payment System: Step-by-Step 

Setting up a credit card payment system might sound complicated, but it’s simpler than it seems.  

Here’s an easy step-by-step guide to walk you through the setup process: 

1. Choose a Credit Card Processor 

Compare different payment processors and pick the one that checks all the boxes. Your payment processor will set the pace for the setup process. They’ll tell you what you’ll have to provide and do. 

2. Create Your Account 

The payment processor will require you to create a merchant account with them. All you have to do is fill out an application with basic details about your business. Approval typically takes a couple of hours. 

Once approved, link your regular bank account to the merchant account. 

3. Order the Necessary Equipment 

If you need card readers or POS tools, now is the time to get them. Most payment processors sell quality hardware and software compatible with their services. Also, if you’re keen on online payments, set up a web page or app to serve as a payment gateway. 

4. Get the System Up and Running 

Once everything is ready, the system can go online. It’s just a simple matter of activating the service and setting a few basic configurations. 

5. Run a Test Payment 

Finally, run a few test payments to see if the system works. Run tests for every payment scenario (swipe, tap, online, mobile, etc.). If everything checks out, you’re good to go. 

Getting Paid: Deposits and Cash Flow Timing 

There’s one more thing you should know about credit card processing. Tapping or swiping a card only initializes and authorizes the payment.  

The money is immediately held or drawn from the payer’s account, but it takes a while before it reflects in your account. 

It takes 1-3 business days to get paid. So, you must plan your cash flow around this wait period. 

Also, most payment processors do what’s called batch deposit processing. The payment system automatically submits a group of credit card transactions for processing at one time. You can set this up to send a daily batch of transactions at closing time. 

Processing card transactions this way is cheaper and more secure than processing every single payment in real time. 

Doing this also means the money comes to you in large batches. So, again, plan your cash flow accordingly. Track incoming payment batches on the system’s dashboard to see how much money to expect and when. 

RELATED ARTICLE — How Credit Card Payment Processing Works: A Complete Guide 

Pro Tips for Faster Payments and Happier Customers 

Accepting credit cards improves your bottom line and credibility. It also boosts customer satisfaction and helps you get paid faster. 

But you also have to do your part in streamlining the payment experience: 

• Offer multiple payment options, including in-person, contactless, online, and mobile payments. 

• Use digital invoices and receipts. 

• Set up automatically recurring billing where applicable. 

• Promote “We Accept Cards” signage. 

• Encourage customers to take the first swipe confidently. 

• Automate payment reminders. 

• Clearly communicate the payment procedures and terms. 

Getting Started with Small Business Credit Card Payments 

Ready to add credit card payments to your business? Here are quick steps you can take to jumpstart the process.  

• Shop around for the best credit card processor. 

• Go for an all-in-one payment processing solution. 

• Set up your payment system with convenience, efficiency, and flexibility in mind. 

• Mind security compliance requirements. 

• Announce that you accept credit cards at checkout. 

• Track card transactions to get a clear picture of your business’s payment performance.