Set up a way for customers to send you the card details
To receive a credit card payment, you need a system that lets customers enter their card information securely. You have three main routes: a payment processor (like Square, Stripe, or PayPal), a merchant account through your bank, or a payment gateway that connects to your existing bank account.
A payment processor is the simplest for small businesses or one-time payments. You sign up, get a unique link or form, and customers enter their card details there. The processor handles the security and deposits money into your account. A merchant account requires more setup but gives you lower fees if you process many payments. A payment gateway sits between your website and your bank, encrypting the card data so your bank never sees the raw numbers.
Do not ask customers to email, text, or mail you their card numbers. That exposes both of you to fraud and violates payment card industry rules. Even if you think you are being careful, unencrypted card data is a liability you do not want.
Key Takeaways
- Use a payment processor, merchant account, or payment gateway—never ask customers to send card details by email or text.
- The processor or gateway encrypts the card data and handles the security compliance so you do not have to store raw card numbers.
- Money from credit card payments usually lands in your account within one to three business days, depending on your processor and bank.
- You will pay a fee per transaction (typically 2 to 3 percent plus a flat amount) or a monthly subscription, depending on which service you choose.
- Keep records of every transaction, including the customer name, amount, date, and confirmation number, for your records and tax purposes.
How the payment moves from the customer's card to your account
When a customer enters their card number into your payment form, the processor or gateway encrypts it immediately. That encrypted data goes to the card network (Visa, Mastercard, American Express, or Discover), which checks with the customer's bank to confirm the funds are there and the card is not stolen or blocked.
If the bank approves the charge, the money does not move right away. Instead, the processor holds the authorization and batches it with other transactions from that day. At the end of the business day, the processor sends the batch to your bank. Your bank then requests the money from the customer's bank, which takes one to three business days to complete. That delay is why customers see a pending charge before it disappears or becomes final.
Once the money lands in your account, it is yours. The customer's bank cannot reverse it unless the customer disputes the charge or the card was fraudulent—and even then, the reversal takes time and you have a chance to respond.
Fees you will pay for each transaction
Credit card processing is not free. Most processors charge a discount rate—a percentage of the transaction amount—plus a flat per-transaction fee. A typical rate is 2.2 percent plus $0.30 per transaction, but this varies by processor, your sales volume, and the type of card (debit cards and cards from the customer's own bank often cost less to process than rewards cards or international cards).
Some processors offer a flat monthly subscription instead of per-transaction fees. This works if you process a high volume of payments. Others charge a tiered rate: lower fees if you process more than a certain amount per month, higher fees if you process less.
Read the processor's pricing page carefully. Some charge extra for chargebacks (when a customer disputes a charge), refunds, or failed transactions. A few charge a monthly account fee on top of transaction fees. These hidden costs add up if you process many payments.
What information you need to collect from the customer
Your payment form should ask for the card number, expiration date, and CVV (the three-digit security code on the back). Do not ask for the customer's Social Security number, driver's license number, or other identity documents—the card details are enough to process the payment.
You should also collect the customer's name, email, and billing address. The processor uses the billing address to verify the card is legitimate (a process called address verification). If the address does not match what the card issuer has on file, the processor may decline the charge or flag it as high-risk.
Keep these records for your own accounting and customer service. If a customer disputes the charge later, you will need to show that you processed it correctly and the customer authorized it. Do not store the raw card number after the transaction is complete—your processor handles that, and you should delete it from your own files.
When the money actually arrives in your bank account
The timeline depends on your processor and your bank. Most processors deposit money within one to three business days of the transaction. Some offer next-day deposits for an extra fee. A few hold the money for longer if you are a new merchant or if your transaction volume spikes suddenly—this is a fraud prevention measure.
Weekends and holidays slow things down. If a customer pays on Friday evening, the processor may not send the batch to your bank until Monday, and your bank may not complete the transfer until Wednesday or Thursday. If a customer pays on a holiday, add another day or two.
Check your processor's dashboard to see the status of each transaction. Most show you when the charge was approved, when it was batched, and when it was sent to your bank. Your bank's app or website will show you when the money actually hit your account.
Protecting yourself from fraud and chargebacks
A chargeback happens when a customer tells their bank the charge was unauthorized or the product never arrived. The bank pulls the money back from your account and gives it to the customer. You then have a window (usually 7 to 10 days) to dispute the chargeback by providing proof that the customer authorized the charge and received what they paid for.
To protect yourself, keep records of everything: the customer's name and email, the exact amount charged, the date, the confirmation number from your processor, and any messages between you and the customer. If you shipped a physical product, keep the tracking number. If you delivered a service, keep a record of when and what was delivered.
Some processors offer chargeback protection or fraud insurance that covers losses if a chargeback is ruled against you. This costs extra but is worth it if you process high-value transactions or sell to customers you do not know.
Watch for red flags: a customer paying with a card registered to a different name or address, multiple failed attempts before one succeeds, or an unusually large order from a new customer. Your processor's fraud detection tools will flag some of these automatically, but you should review suspicious transactions before shipping or delivering anything.
Refunding a credit card payment
If a customer asks for their money back, you issue a refund through your processor. The refund goes back to the same card the customer used to pay. You do not send them cash or a check.
A refund takes one to three business days to appear on the customer's statement, just like the original charge. The customer's bank processes it, not your processor. If the customer disputes the refund or says they never received it, ask your processor for the refund confirmation number and send it to the customer.
Some processors charge a small fee for refunds, and some do not. Check your pricing page. If you refund a transaction within a certain window (often 24 hours), many processors waive the fee.
Frequently Asked Questions
Can I accept credit cards without a website?
Yes. You can use a payment link (a unique URL your processor generates) and send it to customers by email or text. Customers click the link, enter their card details, and pay. You do not need to build a website or hire a developer. Processors like Square, PayPal, and Stripe all offer this.
What if a customer's card is declined?
The processor will tell you and the customer why: insufficient funds, card expired, card reported stolen, or the bank blocked the charge for security reasons. Ask the customer to try a different card or contact their bank. Do not charge the card multiple times—each attempt counts as a separate transaction and may trigger fraud alerts.
Do I have to pay taxes on credit card payments?
Yes. Credit card payments are income, just like cash or checks. You report them on your tax return. Your processor will send you a 1099-K form at the end of the year if you process more than a certain amount (this threshold varies by year and state). Keep your transaction records for your accountant or tax preparer.
What happens if my processor goes out of business?
Your money is safe. Processors are required to hold customer funds in separate bank accounts, not their own operating accounts. If a processor fails, your bank and the card networks ensure the money reaches you. You may experience a delay while accounts are sorted out, but you will not lose the funds.
Can I charge a customer's card without their permission?
No. You must have the customer's explicit authorization before charging their card. If you charge without permission, the customer can dispute it as unauthorized and win the chargeback. For recurring charges (subscriptions or installment plans), you need written or digital consent that clearly states the amount, frequency, and start date.