Accepting Credit Cards as a Merchant

Brendan Harkness

Brendan Harkness

Updated Sep 13, 2016

With the growing use of credit and debit cards, businesses have begun a transition to merchant account services and mobile payment processors. These payment systems allow businesses to easily give their customers multiple payment options.

If you want to accept credit or debit cards, you may consider implementing a merchant account services provider. This is typically a bank or other financial institution that provides a business with the tools it needs to accept credit and debit cards from consumers.

The merchant account services provider is the bridge between the business and the consumer’s payment method (credit card company or bank issuer). This ensures that the payment is processed and accurately withdrawn.

Although merchant services providers do cover all credit and debit card needs for a business, it is certainly not free. As a business owner, you will need to pay fees every month and per transaction.

Similarly to merchant service providers, mobile credit card processors have customers set up a merchant account to receive credit and debit card payments. With mobile processors, businesses can receive and process payments wirelessly.

Mobile credit card processors are best for merchants who want to accept their customers’ credit cards anytime, at any location. Some examples are small business owners, food trucks and street vendors. In addition, brick-and-mortar stores that want to provide the option of paying away from the cash register can make good use of mobile card processors.

If you’re looking for business credit cards to use yourself, check out our business credit resources »

How to Decide on a Merchant Service Provider

When choosing a provider, you should consider many factors including the costs, how easily you will be approved, the equipment offered, and the types of customer service available. For businesses that mostly sell their products or services online, it will be necessary for the merchant services provider to include all of the Internet-based features, including virtual payment terminals and payment gateways.

The Ways Companies Can Accept Payment

When you open a merchant account, be sure that the provider offers the type of account you need to run your business.

The types of merchant accounts you can choose from include:

  • Internet merchant account: Businesses that operate online should use this type of account. Through this option, businesses have the ability to process credit and debit card payments through their website.
  • Retail merchant account: This type of account is typical for businesses that have a storefront location. In this option, the customers’ credit and debit cards will be swiped through the payment terminal.
  • Mobile credit processors: These processors allow businesses to use their iPhone, iPad, and other smartphones and tablets as payment terminals. This allows businesses to accept payments anywhere there is mobile service.
  • Mail or Telephone Order merchant account (MOTO): An account of this type accepts and processes payments by phone or direct mail.

Fees for Merchants

Transaction Fees

  • When a buyer pays with a credit or debit card, merchants pay 1.5% – 4% of the total purchase amount to the credit card issuers (a cost that stores may now pass on to consumers, see above). This fee can be especially onerous for small, mom-and-pop stores where low-volume, low-cost purchases are common.

Terminal Rental Fee

  • Merchants must rent a credit card processing terminal, generally for $20 to $100 a month

For consumers, the best way to avoid unnecessary fees is to know everything about your credit card—take the time to read the fine print or ask your bank. Be aware if the shops you frequent are implementing the new swipe fee. And comply with the terms of your card – make all payments on time and avoid going over your credit limit.

Preventing Stolen Credit Cards from Being Used on Your Ecommerce Site

Credit card fraud is a serious problem, and unfortunately online merchants are one of the most popular targets for fraudsters. It’s easier to be quick and remain anonymous while testing credit card numbers with online sites rather than brick-and-mortar, and many small businesses aren’t taking the precautions that larger ones do.

So what can you do to protect yourself? Here are some tips for preventing and tracking fraudulent credit card use on your website:

  • If outsourcing your shopping cart, use a secure, professional service.
  • If managing your own shopping cart, keep all of your software up to date.
  • Make sure that you are completely compliant with PCI Data Security Standards.
  • Enable Address Verification and Credit Card Code Verification in your shopping cart.
  • Use tracking numbers for all orders.
  • Collect ISP information for all orders, and compare the geo-locations to user-submitted addresses. A difference in location is a warning sign.
  • Check if a proxy server was used for transactions, keeping the buyer anonymous.
  • Check the validity of shipping and profile information: phone numbers with correct area codes, addresses, etc.
  • Set up an alert system and/or train employees to check for suspicious activity, like a huge number of purchases or many different card numbers being used in the same time period from the same IP address, or unusual international orders.

Resources for Merchants

What Can Merchants Do: Preventing Credit Card Fraud

Credit card fraud is a serious problem, costing merchants billions of dollars worldwide every year. Fraud comes in many forms – is your store protected? Read more »

What Can Merchants Do: Accepting Credit Cards without a Signature

When customers make a purchase with a credit card, does the back of their card need to be signed? What if it isn’t Can a person write “See ID” in the box instead of signing?  Read more »

What Can Merchants Do: Do I Have to Pay a Credit Card Surcharge

What kind of surcharges can a merchant charge for credit card purchases? Are all cards of a certain type charged, or do the charges only apply to certain products? Are surcharges legal in every state? Read more »

What Can Merchants Do: Requiring a Minimum Amount for Credit Card Purchases

Can you require a minimum purchase amount for customers who want to pay with a credit card? What is the legal status of this, and is there anything customers can do about it? Read more »

A Guide to Apple Pay for Merchants

Apple Pay is a payment system for new iPhones and Apple Watches, acting as a digital wallet to hold credit card information. Apple Pay makes use of NFC payment terminals. Learn more about how Apple Pay works and where it can be used. Read more »

Quora Question and Answer

Online Payment Gateways and Processing: With the rise of digital wallets, what are the implications to “Card Present” vs. “Card Not Present” transactions/trends/policy?

The rising popularity of digital wallets has raised new questions about how credit card payments are processed. Do digital wallet transactions count as Card Present transactions or Card Not Present? Learn the steps involved in credit card payment processing, and how digital wallets impact the way payments are made.

Best Payment Systems for Merchants

Although each business will have different criteria for choosing a payment system, there are a few key aspects to keep in mind. One of the most important aspects is low swipe fees and low or no monthly fees. These fees can add up quickly, especially if you’re a small business.

It is necessary for mobile businesses to make sure the mobile credit card processor provides compatible equipment. In addition, the system should accept all major credit cards and potentially debit and gift cards as well.

Some additional features you might want include the ability to capture signatures directly onto a mobile device, calculate sales tax, accept tips, manage customer information, and email or text receipts to customers.

Apple Pay

  • Apple Pay is a digital wallet for credit cards, available on the iPhone 6, iPhone 6 plus, and the upcoming Apple Watch.
  • The program creates a random token number to replace the credit card number, so the actual number is never exposed. A new dynamic code is created for each transaction.  Apple does not track transactions.
  • Merchants and consumers are not charged for using Apple Pay; instead, the banks that issue the credit cards are charged.
  • Currently, Apple Pay is partnered with Visa, MasterCard, and American Express; they are not currently partnered with Discover.


  • Square Register is a free app that works with Square Reader to turn your smartphone or iPad into a mobile point-of-sale. The Register does payments, sales reports, hardware, etc.
  • 2.75% is the price per swipe no matter what the price
  • Accepts Visa, MasterCard, American Express, and Discover cards
  • No monthly fees
  • The customers’ credit card information is stored on its servers, not on the merchant’s reader or device


  • Customers download the free LevelUp app and link it with a credit or debit card. They scan the QR Code with their phone at the point-of-sale to pay. A few seconds later, they receive a digital receipt that confirms their payment
  • Integrated with most major POS systems, Standalone, mobile app, and online and In-App ordering
  • When a customer pays with LevelUp, they’re immediately visible in a customer database, with name, gender, age, purchase history, etc.
  • LevelUp charges a 1.95% payment processing fee
  • No monthly fees

Intuit GoPayment

  • With Intuit, you swipe, key, or take a photo of your customer’s credit card information. You can also process the transaction online. Then, the customer signs for the charge using the Intuit GoPayment app. The credit card charges will be processed instantly and you can either email or text a receipt to your customer
  • You can choose a pay-as-you-go plan with a 2.75% swipe fee (only pay per transaction)
  • You can choose a monthly rate of $12.95 with a 1.75% swipe fee (save more on every transaction)
  • All credit and debit cards are accepted


  • With one PayPal account, businesses can accept all forms of payment, in any location
  • Integrated with web, mobile, in-store payments, and online invoicing
  • Base rate of 2.9% + $0.30 per sale
  • 3 payment options customizable to your business

Chase Paymentech

  • Offers payment processing for any type of business including restaurants, retail, internet, and more
  • Accepts Visa, MasterCard, Discover, American Express, gift cards, debit and EBT transactions
  • Chase Mobile Checkout allows you to take payments from your smartphone. You will need the Chase Mobile Checkout App, the Chase card reader, and a Chase Paymentech account


  • Stripe Checkout provides an Embeddable payment for mobile devices, tablets, and desktops
  • Customers can save their details, connected to an email address and phone number, and pay with one tap
  • Secured with single-use SMS codes
  • 2.9% + $0.30 per successful charge, or less based on volume
  • No monthly fees

Flagship ROAMpay Merchant Services

  • Provides a free mobile card reader that swipes all credit and debit cards
  • Rates start at 0.38% + $0.19 per transaction with the free account setup
  • Processing for retail, wireless, restaurant, Ecommerce, and phone/mail order


  • You pay or collect money from anyone in the U.S. for $0.25 per transaction or free for transactions $10 or less
  • You can add a “Pay with Dwolla” button to your website
  • Dwolla offers payment plugins and integrations for your Ecommerce site
  • Your customers may not need to set up an account depending on the custom payment solution that you choose for your business

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