The three ways to accept credit cards online

You can accept credit cards online through a payment processor (a company that handles the transaction), a payment gateway (software that connects your website to a processor), or a point-of-sale system (hardware and software together). Most small businesses start with a payment processor because it requires the least setup. The processor handles fraud checks, deposits money into your bank account, and manages disputes—you just need to integrate their payment form into your website or use their hosted checkout page.

A payment gateway gives you more control but requires you to also hire a separate merchant account provider (the bank that holds the money). A point-of-sale system works best if you also take payments in person. For online-only businesses, a processor is usually the fastest route to launch.

Key Takeaways

  • Payment processors like Stripe, Square Online, and PayPal handle the entire transaction, including fraud detection and deposits to your bank account.
  • You will need a business bank account, an Employer Identification Number (EIN) or Social Security Number, and basic business information to set up a processor account.
  • Transaction fees vary by processor and typically range from 2.2% to 3.5% of the payment amount plus a per-transaction fee, so compare rates before signing up.
  • Money from credit card sales usually deposits into your bank account within one to three business days, though some processors offer faster deposits for an extra fee.
  • PCI compliance (Payment Card Industry standards) is required by law; most processors handle this automatically, but you must never store full card numbers on your own servers.

Choosing a payment processor

The most common processors for small businesses are Stripe, Square Online, PayPal, Shopify Payments, and Authorize.net. Each has different fee structures, setup times, and features. Stripe and Square Online are popular because they charge per transaction (around 2.9% plus $0.30 per card payment) with no monthly fee or setup fee. PayPal charges similar rates but has been in business longer and integrates with more platforms. Authorize.net charges a monthly gateway fee (around $25) plus per-transaction fees, so it makes sense only if you process high volume.

Before you choose, check whether the processor integrates with your website platform. If you use Shopify, WooCommerce, or BigCommerce, your platform likely has built-in integrations that make setup faster. If you have a custom website, look for processors that offer API documentation or pre-built plugins. Also confirm the processor operates in your country and accepts the card types your customers use (Visa, Mastercard, American Express, Discover).

What you need to set up an account

You will need a business bank account in your business name, your Employer Identification Number (EIN) if you are incorporated or an LLC, or your Social Security Number if you are a sole proprietor. You will also need your business address, phone number, and website URL. Some processors ask for your average monthly sales volume and the reason you are accepting cards (to assess fraud risk).

The processor will run a background check and verify your bank account by depositing small amounts (usually under $1) and asking you to confirm the amounts. This verification step takes one to three business days. Once verified, you can start accepting payments immediately, though your first deposit may take longer than usual (up to five business days).

How to integrate payments into your website

Most processors offer two integration methods: a hosted checkout page (the customer is sent to the processor's website to enter card details) or an embedded payment form (the form stays on your website). Hosted checkout is simpler to set up and requires less technical work on your end. Embedded forms look more professional and keep customers on your site, but they require more coding and stricter PCI compliance.

If your website uses a platform like Shopify or WooCommerce, the processor's plugin handles integration automatically—you just install it and configure your account details. If you have a custom website, the processor provides code snippets (usually in JavaScript or HTML) that you paste into your checkout page. Your web developer can do this in minutes if you provide them the processor's documentation.

Test the payment form before going live by using the processor's test card numbers (each processor provides these). Process a few test transactions to confirm money flows to your bank account and receipts are sent to customers.

Understanding fees and deposits

Credit card processing fees come in three forms: a percentage of the transaction (interchange fee, typically 1.5% to 2.2%), a processor markup (usually 0.5% to 1.5%), and a per-transaction fee (usually $0.20 to $0.50). A $100 credit card payment might cost you $2.90 to $3.50 in fees. Some processors charge a monthly fee instead of per-transaction fees; this is worth it only if you process more than $5,000 per month.

Money from credit card sales deposits into your business bank account within one to three business days. Some processors offer next-day or same-day deposits for an extra fee (usually 1% of the transaction). Chargebacks (when a customer disputes a charge) are deducted from your account, sometimes weeks after the original transaction. Keep records of all orders, shipping confirmations, and customer communications to defend against chargebacks.

PCI compliance and fraud protection

PCI compliance is a set of security standards required by law to protect customer card data. The main rule: never store full credit card numbers on your own servers. If you use a hosted checkout page or embedded form from your processor, the processor handles PCI compliance for you. If you build a custom payment form, you must hire a PCI-certified developer and undergo annual security audits, which is expensive and not recommended for small businesses.

Most processors include basic fraud detection (checking for mismatched addresses, unusual geographic patterns, and known fraud databases). Some offer advanced tools like 3D Secure (an extra verification step for the customer) or machine learning fraud scoring. Enable these tools in your processor's dashboard. Also set up alerts so you are notified of large or unusual transactions in real time.

Refunds are processed back to the customer's card within one to three business days. Partial refunds are allowed—you do not have to refund the full transaction. Keep a clear refund policy on your website so customers know what to expect.

Frequently Asked Questions

Do I need a separate merchant account?

Not if you use a payment processor like Stripe or Square Online. They provide the merchant account as part of their service. You only need a separate merchant account if you use a payment gateway (like Authorize.net) without a processor, which requires more setup and is less common for small businesses.

What happens if a customer disputes a charge?

The customer's bank contacts your processor with the dispute. Your processor deducts the disputed amount from your account and gives you a window (usually 7 to 10 days) to respond with evidence: an order confirmation, shipping receipt, delivery signature, or customer communication showing the transaction was legitimate. If you do not respond or your evidence is weak, you lose the money and may be charged a chargeback fee ($15 to $100).

Can I accept credit cards without a website?

Yes. Most processors offer a payment link feature—you generate a unique URL and send it to the customer via email or text. The customer clicks the link and enters their card details on the processor's hosted page. This works for invoices, donations, or one-off sales. Some processors also offer mobile apps so you can accept payments on your phone.

How long does it take to get approved?

Most processors approve accounts within 24 to 48 hours. Bank account verification takes one to three business days. You can usually start accepting payments while verification is pending, though your first deposit may be held until verification is complete. High-risk businesses (like gambling, adult content, or high-ticket items) may take longer or be declined.

What if I process a very small number of transactions?

Processors with per-transaction fees (Stripe, Square Online) are still your best option because there is no monthly fee. If you process fewer than 10 transactions per month, the fees are minimal. Avoid processors with monthly fees unless you plan to scale up quickly.