How to Take Credit Card Payments for Your Small Business

Published under the Operations Hat on HatStacked.com

You’ve got a product, a customer, and the kind of eager, slightly sweaty handshake that screams “first sale.” Now all you need is a way to get paid that doesn’t involve IOUs or interpretive dance. Welcome to the world of credit card processing.

Yes, You Absolutely Need to Accept Credit Cards

Even if your business is small, local, or delightfully handmade, people still expect to pay with plastic. Or more likely, their phones pretending to be plastic.

Why credit card payments matter:

• Customers spend more when they can swipe or tap
• It builds trust and legitimacy
• Cash-only makes you look like a tax-dodging food truck from 1997

Let’s break down exactly how to take credit card payments for your small business without creating a financial sinkhole.

Step 1: Decide How You’ll Be Accepting Payments

Your options aren’t one-size-fits-all. Are you selling online, in person, or both? Are you mobile? Are you allergic to monthly fees?

If you sell in person:

• Square: Easy setup, no monthly fees, clean hardware
• PayPal Zettle: Similar to Square, integrates with PayPal accounts
• Clover: More complex POS system for physical retail
• Traditional merchant accounts: For high-volume businesses that want lower processing fees but can handle paperwork and setup

If you sell online:

• Shopify Payments: Built-in for Shopify stores
• Stripe: Great API and developer flexibility
• PayPal: Trusted, but not the cheapest
• Braintree: No frills, competivie rates with volume
• Square Online: Simple website + payment combo

Step 2: Understand the Fees

The convenience of plastic comes with a price. Usually around 2.6% to 3.5% per transaction, plus a flat fee like $0.10 to $0.30.

Here’s what to expect:

• Interchange Fees: Set by card networks, unavoidable
• Processor Markup: What your payment provider charges
• Monthly Fees: Some charge for PCI compliance, statements, or access to support
• Chargeback Fees: When Karen disputes the handmade soap she clearly used

Pro tip: If the pricing sheet feels like a math test written in Klingon, walk away.

Step 3: Don’t Forget PCI Compliance (It’s Not as Scary as It Sounds)

The Payment Card Industry Data Security Standard (PCI DSS) sounds like something out of a spy movie, but it’s really just a set of rules to keep you from leaking customer card data all over the internet.

Most processors help you stay compliant, especially if you’re using a hosted solution (like Square or Shopify). If you're DIY-ing it with custom code and a Stripe API, you’ll need to fill out a questionnaire and follow some best practices.

Checklist:

• Use secure networks (HTTPS is a must)
• Don’t store card numbers
• Train staff on security protocols
• Lock down physical access to your POS

Step 4: Actually Set Up the Tech (Without Throwing It at a Wall)

What you’ll need:

• A payment processor or gateway
• A card reader or online checkout system
• A business bank account
• Patience

Most setups are pretty user-friendly now. But if you’re using anything that comes with a terminal and more than one cable, watch the how-to videos. Twice.

Step 5: Reconcile and Record Everything (So Tax Season Doesn’t Kill You)

Every credit card transaction should flow into your books cleanly. Set up integrations between your payment provider and your accounting software (like QuickBooks, Xero, or Wave).

Don’t forget:

• Processing fees are a deductible expense
• Record gross sales and net deposits separately
• Keep an eye on chargebacks and disputes

If it’s not reconciling cleanly, something’s wrong. Check your import settings or hire someone with a spreadsheet tattooed on their forearm.

Related: Accounting Basics for Small Business Owners

Bonus Tips for Making Life Easier

• Display fees clearly so customers don’t panic at checkout
• Add Tap-to-Pay: It’s 2025. Get with the tap
• Watch for hidden fees in contracts
• Don’t overpay for hardware: Most small businesses don’t need a full POS

And if you’re a service business taking phone or invoice payments, check out tools like:

• Invoice + Pay via Square or PayPal
• Stripe Payment Links
• QuickBooks Payments

So, Which Processor Is “Best”?

There’s no one-size-fits-all answer, but here’s a cheat sheet:

You’re Not Just “Taking Payments,” You’re Building Trust

People trust businesses that accept cards. They assume you’re legit. They assume you’ll ship. They assume someone is watching your numbers.

Getting this right doesn’t just help your operations. It makes your customers more likely to come back and tell their friends.

Bottom Line: You can absolutely accept credit card payments as a small business. Just don’t sign up with the first glossy brochure you see. Compare rates, check reviews, and make sure it integrates with the rest of your systems.

And if you’re still not sure? Go with Square. It’s not perfect, but it’s dead simple and hard to mess up.