How to Accept Credit Card Payments: Setup, Fees and Rules

To accept credit cards, you sign up with a payment processor, connect it to the place where customers pay you, and the processor deposits the money, minus its fees, into your bank account. For a small business, the setup comes down to five decisions:

1. Where customers pay: in person (a card reader or terminal), online (a checkout page or payment link), or on an invoice (a "Pay now" button).
2. Which processor: a payment service provider such as Stripe, Square or PayPal, which you can sign up for online, or a dedicated merchant account through a bank or reseller. See what a merchant account is and how payment processing works.
3. What it costs you: the processor's rate for each type of payment, and whether you offer a cheaper option such as a bank payment.
4. How you keep card data safe: the card industry's security standard, PCI DSS, applies to every business that takes cards.
5. How the money reaches your books: payouts arrive net of fees, so record the fee and the sale separately.

The worked example below shows how those choices change what you keep from one invoice.

Worked example: one $1,800 invoice, five ways to pay

Sample business and invoice. The rates are Stripe's published US standard rates, from stripe.com/pricing, checked on October 29, 2026. Your provider's rates may differ, so check its pricing page.

A landscaping company invoices a homeowner $1,800 for a spring cleanup. Here is what the company keeps under each way the customer might pay through Stripe:

• US card, online through the invoice link (2.9% + 30¢): fee $52.20 + $0.30 = $52.50; company keeps $1,747.50.
• US card, number typed in by the company (manually entered: 2.9% + 30¢, + 0.5%): fee $52.50 + $9.00 = $61.50; company keeps $1,738.50.
• US card, tapped or inserted in person on a Stripe Terminal reader (2.7% + 5¢): fee $48.60 + $0.05 = $48.65; company keeps $1,751.35.
• Card issued outside the US, online (2.9% + 30¢, + 1.5%): fee $52.50 + $27.00 = $79.50; company keeps $1,720.50.
• ACH Direct Debit from the customer's bank account (0.8%, capped at $5.00): 0.8% = $14.40, capped at $5.00; company keeps $1,795.00.

What the example shows:

1. How the card is taken matters. Typing in a card number the customer read out over the phone costs $9 more on this invoice than the customer paying through the link themselves.
2. Bank payments are far cheaper on larger invoices. The company sends 10 invoices like this a month. If customers moved from card to ACH, it would save ($52.50 − $5.00) × 120 = $5,700 a year. Some customers prefer to pay by card, so offer both and let them choose. See how ACH payments work.
3. Adding a surcharge has rules. Under Visa's US rules, the company could add a surcharge to credit cards only, never debit or prepaid cards. The surcharge can't exceed its cost of accepting that card or 3%, whichever is lower, and only where state law allows it (see "Surcharges" below).

Step 1: Decide where customers will pay

• In person. A card reader or terminal takes chip, contactless and wallet payments. Stripe's in-person rate (2.7% + 5¢) is lower than its online rate. For crews in the field, see the mobile payments guide.
• Online. A checkout page or a payment link you send by email or text. A payment gateway passes the card details to the processor.
• On invoices. For service businesses, a direct route is a "Pay now" button on each invoice, so the customer pays the exact amount without retyping anything. Billed, which publishes this guide, connects to Stripe and PayPal to add online payment to the invoices you send. Billed doesn't charge extra for this: only Stripe's or PayPal's standard rates apply (Billed payments; PayPal integration).

Step 2: Choose a processor and compare costs

Compare providers on what you will actually process, not on the headline rate alone:

• the rate for each way you'll take cards (in person, online, manually entered);
• extra charges for international cards and currency conversion;
• dispute (chargeback) fees. Stripe charges $15.00 for each dispute received (Stripe pricing);
• how quickly payouts reach your bank;
• monthly fees, contract length and any early-termination fee.

Fees change, so take them from each provider's own pricing page rather than from comparison articles. For processor comparisons, see best payment processing for small business and Stripe vs. PayPal. For ways to lower what you pay, see how to reduce payment processing fees.

If a developer is connecting your site or app directly, you'll need API credentials. See finding your Stripe API key or your PayPal API signature.

Step 3: Set up card security (PCI DSS)

The Payment Card Industry Data Security Standard (PCI DSS) is "a set of baseline technical and operational requirements designed to protect payment account data." It applies to "all entities that store, process, or transmit cardholder data." The PCI Security Standards Council says that includes merchants "regardless of their size or transaction volume" (PCI SSC merchant resources).

What that means for a small business:

• Ask your processor how you validate compliance. The PCI SSC says whether a small merchant must validate compliance "is determined by the individual payment brands." Merchants should ask their acquirer (merchant bank) or payment brand. Self-Assessment Questionnaires (SAQs) come in several versions for different setups (PCI SSC).
• Keep card numbers out of your own systems. If customers enter their card on the processor's checkout or invoice payment page, card data doesn't pass through your email, spreadsheets or files. Never ask a customer to email or text a card number.
• Guard against the common threats. The PCI SSC lists phishing emails disguised as invoices, weak remote access to payment systems, weak passwords, outdated software and skimming devices attached to card readers (PCI SSC). Limit who can log in to your payment dashboard, and check card readers for tampering.

Step 4: Set your policies before the first payment

• Statement descriptor. This is the name customers see on their card statement. Stripe says clear and accurate descriptors "can reduce chargebacks and disputes." Its descriptors must be 5 to 22 characters (Stripe docs). Use the business name your customers know.
• Refunds and cancellations. Put your policy where customers see it before they pay, and on your invoices. For services, match deposits and milestones to your invoice payment terms. If you take card deposits on larger jobs, see the guide to deposit invoicing.
• Test before you go live. Run a small real payment through each channel (reader, payment link, invoice). Check the receipt, the payout and the fee shown in your dashboard.

Surcharges: passing the card fee to customers

In the US, Visa allows merchants to surcharge credit card payments under these conditions (Visa merchant surcharging Q&A, linked from Visa's rules and fees page):

• notify your acquirer (the bank or processor you use for card payments) at least 30 days before you start;
• surcharge credit cards only, because "debit cards and prepaid cards cannot be surcharged";
• keep the surcharge at or below your merchant discount rate for that card or 3%, whichever is lower;
• disclose it at the point of entry, at the point of sale, and on every receipt.

State law comes first. In that Q&A, Visa says its understanding as of February 15, 2024 was that Connecticut, Maine, Massachusetts, Oklahoma and Puerto Rico prohibit surcharging, and that Colorado, Minnesota, New Jersey and New York have requirements for it. Visa adds that this isn't legal advice and may contain errors, so check the current law where your business is located, or ask a lawyer, before you add a surcharge. Mastercard, American Express and Discover have their own surcharge rules, so ask your processor about every card brand you accept.

Step 5: Reconcile payouts in your books

Processors pay out the sale minus fees. That $1,800 card payment arrives as $1,747.50. Record:

• the full $1,800 as income (or as payment of the invoice);
• the $52.50 as a processing fee expense.

That way, your sales and your bank deposits both reconcile. Refunds and disputes come out of later payouts, so match each payout to the payments inside it. See bookkeeping basics and small business financial statements.

Customers paying from abroad may face currency conversion. Stripe adds 1.5% for international cards and 1% if currency conversion is required (Stripe pricing). For other ways overseas clients can pay, see international payment methods. To make invoices easy to pay, see how to create a professional invoice.

Frequently Asked Questions

What is the cheapest way to accept card payments?

It depends on how the card is taken and on each provider's rates. With Stripe's US standard pricing, in-person card payments (2.7% + 5¢) cost less than online ones (2.9% + 30¢), and manually entered cards cost an extra 0.5%. For large invoices, a bank payment such as ACH Direct Debit (0.8%, capped at $5.00 on Stripe) costs less than any card. Check each provider's pricing page before you choose.

Can I add a credit card surcharge?

In the US, Visa allows surcharges on credit cards only, not debit or prepaid cards. You must notify your acquirer 30 days in advance, cap the surcharge at your card acceptance cost or 3%, whichever is lower, and disclose it at entry, at checkout and on the receipt. State law can prohibit or limit surcharges. Visa says Connecticut, Maine, Massachusetts, Oklahoma and Puerto Rico prohibit them as of February 15, 2024, so check the current law where you're located.

Does a small business need to be PCI compliant?

Yes. The PCI Security Standards Council says PCI DSS applies to all entities involved in payment processing, including merchants, regardless of size or transaction volume. Whether and how you must validate compliance is set by the card brands, so ask your acquirer or processor which Self-Assessment Questionnaire applies to you.

How do I accept credit card payments on invoices?

Connect a payment processor to your invoicing software, so each invoice includes a payment link or "Pay now" button. The customer pays the invoice amount by card on the processor's page, and the payout reaches your bank minus the fee. In Billed, you connect Stripe or PayPal for this.

Why do card fees differ between in-person and online payments?

Processors set a separate rate for each way a card is taken. On Stripe's US standard pricing, an online domestic card payment costs 2.9% + 30¢, an in-person payment on Stripe Terminal costs 2.7% + 5¢, and a manually entered card costs an extra 0.5%.