A Beginner's Guide to Accepting Credit Card Payments

Are you a small business owner looking to start accepting credit card payments? Don't worry, it's not as complicated as it seems. There are only two things you need - a credit card processing service and a way to collect your customer's credit card information. With so many options available, we know it can be overwhelming. That's why we've broken down each aspect and provided guidance to help you find the best option for your business.

Choosing the Right Processing Service

The first decision you'll have to make is between a traditional merchant account or a third-party payment processor like PayPal or Square. To determine the best fit for your business, consider the type of payments you'll be accepting - online, in-person, or by phone.

In many cases, payment service providers include some form of payment entry at no additional cost, making it easier for small businesses to get started.

Collecting Credit Card Data

If you plan on accepting payments over the phone, you'll need a point-of-sale system that allows you to manually enter the card details. This type of transaction is known as a card-not-present transaction and is common for businesses like restaurants and florists. Keep in mind that these transactions usually come with a higher fee due to the increased risk of fraud.

To accept credit card payments on your smartphone, you'll need a mobile card reader. These readers can connect to your phone through a plugin or Bluetooth and come in magnetic stripe (magstripe), EMV chip, or contactless options. Popular payment processors like Square or PayPal offer these readers.

The Cost of Accepting Credit Cards

One of the key factors to consider when it comes to accepting credit cards is the transaction fees. These fees are a percentage of the sale price that you pay for each transaction and can be confusing as they may vary based on different factors.

If you opt for a traditional merchant account, your transaction fees may vary based on:

• The credit card network (Visa, Mastercard, etc.)
• The type of credit card (business, rewards, etc.)
• The payment method (online, in-person, by phone, etc.)

According to Reuters, industry analysts estimate the average processing fee to be between 1.5 to 3.5%.

Alternatively, using a third-party payment processor usually means a flat rate for transaction fees. For example, HubSpot Payments charges a simple 2.9% regardless of the type of credit card used by your customer.

Top 5 Recommended Payment Processing Services

With so many payment processing services available, it can be challenging to determine which one is best for your business. To make it easier, here are the top five recommended for small businesses:

1. HubSpot Payments - Best Overallsome text
   • Fees: Flat 2.9% of transaction amount
   • Other Costs: None
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   • Ability to accept credit cards directly from your website
   • Secure and shareable payment links via email or text
   • Embedded payment links on quotes or invoices
   • Instantly connects customer purchase history to records or reporting
   • Enables recurring payments and subscriptions

HubSpot Payments is a seamless payment tool that integrates with your CRM. It allows you to accept all major credit and debit cards, ACH payments, and even recurring payments. Plus, you can accept payments directly from your website or through shareable payment links embedded in emails, text messages, or invoices. It also offers the added bonus of syncing sales data with customer records and reporting.

If you're a U.S.-based user with a starter account or above on Sales Hub, you can access HubSpot Payments with no setup fees or monthly charges, and a flat rate transaction fee of 2.9%.

Why We Like It:

1. Stripe - Best for Online Paymentssome text
   • Fees:some text
     • Online: 2.9% + $0.30 per transaction
     • In-Person: 2.7% + $0.30 per transaction
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     • Flexible payment options, including Google Pay and Apple Pay
     • Customizable checkout cart for those with coding experience
     • Pre-built payment pages available
   • Why We Like It:
   • Square - Best for In-Person Paymentssome text
     • Fees: 2.6% + $0.10 per transaction for in-person payments
     • Other Costs: None
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     • Multiple POS system options for in-person payments
     • Easy to use mobile card reader
   • Square is a popular choice for businesses that primarily accept payments in-person. Its mobile card reader connects to your phone through a plugin or Bluetooth and offers magstripe, EMV chip, and contactless options. Square also offers a variety of POS systems to choose from for in-person payments.
   • Why We Like It:
   • PayPal - Best for Small Businessessome text
     • Fees: 2.7% per transaction for in-person payments
     • Other Costs: None
     some text
     • Secure and trusted payment option
     • Fraud protection and chargeback management
     • Mobile card reader and online payment options
   • PayPal is a well-known and trusted option for small businesses. It offers a variety of payment tools, including a mobile card reader and online payment options. PayPal also offers fraud protection and chargeback management for added security.
   • Why We Like It:
   • Dwolla - Best for Large Transactionssome text
     • Fees: $0.05 per transaction for ACH payments, $0.25 per transaction for transactions over $10
     • Other Costs: None
     some text
     • Low transaction fees, especially for ACH payments
     • No monthly fees or setup costs
   • Dwolla is a great option for businesses that regularly process large transactions. It offers low transaction fees and ACH payments, which have a flat fee of only $0.25. However, Dwolla does not offer a mobile card reader, so it may not be the best fit for businesses that primarily accept in-person payments.
   • Why We Like It:

Stripe offers a Bluetooth card reader that can handle swipe, EMV chip, and contactless payments, including Google Pay and Apple Pay. It's a great option for businesses looking for flexibility in payment methods. However, Stripe truly excels in the realm of online payments. It offers pre-built payment pages or the option to embed its checkout cart directly into your website. For those with coding experience, you can also customize your own checkout cart.

The Best Credit Card Payment Options for Your Business

In today's world, it's crucial for businesses to accept credit and debit cards as a form of payment. Luckily, there are plenty of credit card processing options available to meet the needs of your customers and your business. Here are the top choices to consider.

Square - All-in-One Solution for In-Person and Online Payments

Square offers a range of services beyond just mobile payments, including retail registers, point of sale software, and manual entry options. It also provides user-friendly invoicing and appointment scheduling software, and the option to add a payment portal or build an online store for free. For a one-time fee of $49, you can upgrade to a card reader that accepts chip cards, contactless payments, Apple Pay, or Google Pay. With fees starting at 2.6% plus $0.10 per transaction for in-person payments, Square is a versatile option for businesses of all types.

PayPal - Trusted Payment Processor for Online and In-Person Transactions

Known for its reliability and name recognition, PayPal is a popular choice for businesses looking to build trust with their customers. It offers a wide range of payment solutions for both online and in-person transactions, including credit cards, peer-to-peer payments, and Venmo. Customers can choose from swipe, chip, contactless, or QR code payments at checkout. With a one-time fee of $29 for a card reader, PayPal is a convenient and secure option for businesses of any size.

Shopify - Best for E-commerce Businesses

In addition to offering in-person and online payment solutions, Shopify is well-known for its ecommerce platform. With a simple drag-and-drop store builder and built-in checkout cart, setting up an online store is easy. You can also monetize your existing website by adding product cards and a "buy now" button. With features like in-store pickup for online purchases and a POS system to connect your in-store and online sales, Shopify has all the tools you need to run a successful online business. Plus, with fees starting at 2.4% per transaction and no monthly costs, it's a cost-effective choice for businesses of all sizes.

Answers to Common Questions About Credit Card Payments

• Can I accept credit card payments as an individual?
• Accept Credit Card Payments with Ease, Even Without a Registered Business
• Are you a solo entrepreneur or small business owner looking to accept credit card payments? You don't need to have a registered business to do so. With popular payment processors like PayPal, Stripe, or Square, you can easily accept credit card payments from your customers.
• Which Credit Cards are Accepted by PayPal?
• PayPal is one of the most widely used payment processors and accepts all major credit card brands such as Mastercard, Visa, and American Express. It offers a seamless experience for online, in-person, and mobile payments, making it a convenient option for businesses of all sizes.
• Is Venmo a Viable Option for Accepting Credit Card Payments?
• If you're wondering whether Venmo can be used as a payment processor, the answer is no. However, you can use a credit card to make peer-to-peer payments on the app, although this incurs a 3% processing fee and additional cash advance charges.
• Discover the Most Cost-Effective Way to Accept Credit Card Payments for Small Businesses
• For small businesses, using a third-party payment processor like PayPal, Stripe, or Square is the most budget-friendly option. This eliminates the need for monthly charges, hardware costs, and setup fees, making it a feasible choice for businesses just starting out.
• Can High-Volume Businesses Negotiate Lower Transaction Fees with a Merchant Account?
• If your business has a high volume of credit card transactions, negotiating lower transaction fees with a merchant account can help save costs. This can be a more cost-effective option in the long run.
• Minimize Transaction Fees with Third-Party Payment Processors
• While it's not possible to avoid transaction fees completely, using a third-party payment processor can help reduce the costs. Make sure to research and compare different options based on fees, transaction limits, and customer support to find the best fit for your business.
• Choose the Right Payment Processor to Boost Your Revenue
• The payment processor you choose has a direct impact on your business's revenue and customer satisfaction. Take the time to evaluate your business's needs and explore different options before making a decision. With the right payment processor, you can maximize your revenue and provide a seamless payment experience for your customers.