How to Accept Card Payments as a New Business

The first time a customer asks 'Do you take cards?' you want the answer to be yes. Most customers expect to pay by card or phone, in person and online. The good news is that accepting cards is easier for a new business than ever. The choices are mostly about how you sell, what it costs, and where the money lands.

Start With How You Sell

The right setup depends on where customers pay you:

• In person: a card reader that connects to your phone or tablet, or a full point-of-sale system with a register for a shop or restaurant. Look for one that takes chip cards, tap to pay, and phone wallets.
• Online: a checkout on your website or online store, or a simple payment link you can share.
• By invoice: an invoice with a 'Pay now' button, common for services and projects. The customer clicks, pays by card or bank transfer, and the invoice is marked paid.
• By phone: entering a customer's card details yourself in a virtual terminal. Use this carefully; it often costs more and carries more fraud risk.

Many businesses use more than one. A florist might take cards at markets, sell online, and invoice event clients, all through the same provider.

Two Ways to Get Set Up

Payment service providers like Square, Stripe, and PayPal let you sign up online and start quickly, often the same day. They handle the technical side and group many small businesses under their own accounts. They are usually the easiest place for a new business to start.

A merchant account, through a bank or a payment processor, gives your business its own account with the card networks. It can take longer to set up and may involve contracts and monthly fees, but it can make sense for businesses with high or steady sales volume. Either way, the provider will check that your business is real and ask what you sell. Answer honestly and specifically.

What It Costs

Card payments always cost something. Most providers charge a percentage of each sale plus a small fixed fee per transaction. Rates can differ for in-person, online, and keyed-in payments, and some providers add monthly fees or charge for hardware. When you compare, look at:

• The rate for the way you sell most often.
• Monthly fees, contract length, and cancellation fees.
• Hardware costs, if you take in-person payments.
• Fees for refunds and disputes.
• How soon money reaches your bank, and whether faster payouts cost extra.

Build these costs into your prices from the start, rather than discovering them on your first statement.

What You Need to Sign Up

1. Your business's legal name and EIN, matching your IRS records. What Is an EIN, and Who Needs One? explains how to get one.
2. A business bank account for payouts, in the business's name. Why Your LLC Needs a Business Bank Account explains why it matters.
3. Your personal details as the owner, including a home address, to verify your identity.
4. A clear description of what you sell, and your website if you have one.

Protect Yourself and Your Customers

• Never write down or store customers' full card numbers. Let your provider's tools handle card details; that keeps most of the security burden of the card industry's PCI rules with them.
• Use contracts or clear terms for services, and get signatures or written approval before work starts. They are your best evidence if a customer disputes a charge.
• Put your business name in a recognizable form on the customer's card statement, so they do not dispute a charge they do not recognize.
• Post your refund policy where customers see it before they pay.
• Respond to disputes quickly, with receipts, messages, and proof of delivery.

When the Money Arrives

Card payments do not land in your bank the moment a customer pays. The provider collects the funds, takes its fees, and pays out the rest to your bank account on a schedule, often within a few business days. New accounts sometimes have longer first payouts, and providers may hold funds if a sale looks unusual, such as a very large first order or a sudden jump in sales.

Plan your cash around the payout schedule, not the sale date. And tell your provider ahead of time if you expect a big order or a busy season. It helps avoid surprise holds.

Don't Forget Sales Tax and Records

If you sell taxable products or services, you may need a sales tax permit and to collect tax at checkout. Most providers can add tax to each sale once you set the rates. Your provider also reports card payments to the IRS: if your payments pass certain thresholds, you will receive a Form 1099-K. Make sure your books record each payout and the fees taken out of it. What Is Bookkeeping? Bookkeeping vs. Accounting covers how.

Our sales and payments service helps you choose and set up the payment tools that fit how you sell, and our sales tax permit and business banking services cover the pieces around it. Each one is available on its own.

Choose the setup that fits how customers already want to pay you, and keep every payment flowing into the business.