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Running a small business means keeping a tight handle on cash flow. One way to facilitate the movement of money in and out of your business is to expand your payment options to include credit cards. Allowing customers to pay via credit card can make managing cash flow less stressful and eliminate the delays associated with waiting for check payments. If your business isn’t accepting credit card payments yet, changing that may be easier than you might think.

Key Takeaways

  • Accepting credit card payments for your business can make managing cash flow easier and potentially boost sales. 
  • More Americans are relying on credit and debit cards as a payment method instead of cash or checks. 
  • You can accept credit card payments whether you run a large business or a small one. 
  • Setting up your business to accept credit card payments doesn’t have to be a complicated process. 

Benefits of Accepting Credit Card Payments

Allowing your customers to pay with credit cards can yield a number of advantages for your business that could lead to greater growth. According to the National Federation of Independent Businesses, the major reasons to accept credit cards include:

  • Improving cash flow, since it can speed up payment times and reduce delays
  • Legitimizing your business in the eyes of customers
  • Potentially boosting sales volume since your customers will have more ways to pay

If you’re still not sold on the idea of accepting cards, consider the growth of credit card payments compared to other payment methods. Research from Deloitte shows that credit cards made up nearly $4 trillion in payment volume in the U.S. in 2018. Between 2016 and 2018, credit card transactions increased, while the percentage of Americans using cash to pay declined.

That’s a trend that may continue if demand for contactless and/or digital payments also rises. As a result of the 2020 economic crisis, for instance, 64% of small businesses said they were trying to steer clients away from using cash and checks in favor of digital payments, such as credit cards. Credit cards could become an even more common payment method as Americans move a greater portion of their transactions online—even when buying from brick-and-mortar businesses, such as local restaurants offering delivery services or stores with curbside pickup.

What Types of Businesses Can Accept Credit Card Payments?

The short answer is that virtually any kind of business can accept credit cards these days. For example, you could choose to accept credit cards if:

  • You run a brick-and-mortar business
  • Your business operates completely online
  • You have a traditional small business with employees
  • You’re a sole proprietor with zero employees
  • You’re an independent contractor or freelancer 
  • You have a mobile business (such as a food truck or dog grooming service)

In any of those scenarios, accepting credit card payments could work in your favor if it makes it easier for customers to pay. Deciding not to accept credit cards in your business usually comes down to personal choice, rather than the type of business you run. 


If you decide to accept credit card payments, federal law requires that you verify that those payments are authorized by the customer before processing them. That is typically done behind the scenes, and virtually instantaneously, by a payment processing service.

How to Accept Credit Card Payments

If you’re ready to accept credit card payments for your small business, there are a few steps you’ll need to follow. But once you get a system set up, it’s relatively easy to oversee and manage. 

1. Decide How You’ll Accept Credit Card Payments

The first step is determining when and how to accept credit card payments. For example, you can take credit card payments:

  • Online
  • In-person
  • Using a mobile card reader

The option you choose may depend on the type of business you run. If you have a brick-and-mortar retail store, for example, you may accept credit cards in-person at checkout or online if you’ve set up an e-commerce store. But if you run a mobile business, using a mobile card reader may be the best option. 


You’ll also need to decide which of the major credit card networks (Visa, Mastercard, Discover, or American Express) you want to accept. 

2. Choose a Payment Processing System

When a customer gives you their credit card to pay, there’s more to it than simply swiping the card. The customer’s card and account details have to be reviewed and processed electronically so the payment to you can be authorized. All of this happens digitally behind the scenes in a matter of seconds, but you need to hire a payment processor to make it all work. 

If you want to accept credit card payments, there are two ways you can do it: merchant accounts or payment service providers. A merchant account is an account you open with a bank to accept credit card payments. Payment service providers are companies that allow you to accept credit card payments without setting up a merchant account. 

Of the two, a payment service provider may charge lower processing and transaction fees. So it may work well for you if you have a newer business or relatively small credit card payment volumes. But if you do a large volume of sales from credit cards, then a merchant account could be an easier way to manage your credit card payments. 


When comparing merchant accounts and payment service providers, consider whether you have to sign a long-term contract and what fees you’ll pay for credit card processing. 

3. Get Your Credit Card Payment Software and Hardware in Place

Once you have a method of processing credit card payments in place you may need to update your point of sale software and hardware to actually accept them. 

For example, if you run a brick-and-mortar business you may need to purchase checkout software to accept card payments or install a card reader that’s EMV chip-enabled at the checkout. Some payment service providers will also supply the equipment you need to get set up for accepting credit card payments in-store or via a mobile card reader. 

If you plan to accept credit cards online you’ll also need to set up a payment gateway for that. Again, this may be included with your merchant account or payment service provider plan. 

Pay Attention to Credit Card Payment Processing Fees

Accepting credit cards through a merchant account or payment service provider isn’t free; both charge service fees to facilitate those payments. As you get ready to accept credit card payments, consider how those fees factor into your operating and overhead costs. 

If the fees are going to take a serious bite out of profits, you might compensate by increasing prices for your products or services. Or you could add on a surcharge or convenience fee for processing credit card transactions below a certain dollar amount. But be sure you’re aware of state and federal regulations on credit card surcharges to avoid any illegal practices.