By far, credit card and debit card payments are two of the most commonly used forms of payment for online purchases. In fact, nearly one-third of U.S. consumer purchases are made using a credit card, according to Visa Inc. 

In addition to being one of the most common forms of payment, credit cards have been linked to the likelihood of higher-priced purchases and “impulse buys.” Although card payments add another layer of complexity to your daily operations, many company owners have found that the pros outweigh the cons when it comes to expanding beyond a cash-based business. 

Here are some factors to consider if you’re thinking of accepting credit card transactions on and off the web.

Establish a Merchant Account

To accept credit card payments, you’ll need the following: 

  • A merchant account
  • A bank account
  • A method for processing credit card payments 

Using these components, there are two methods for accepting credit card payments: either through your own merchant account, or via a non-bank/third-party payment processor (also known as a payment gateway), such as QuickBooks Payments or PayPal.

Managing Your Own Merchant Account 

A merchant account can be established through your local bank, although policies and procedures differ from country to country. The biggest benefit of opening a merchant account directly with a bank is that you bypass the transaction costs normally associated with third-party payment processors. However, the initial setup costs of a merchant account are typically higher than that of a payment gateway. 

Startup fees for establishing merchant accounts range anywhere from $50 to $200, not including possible monthly transaction fees. Moreover, these charges will depend on factors such as the degree of risk per transaction and whether customers purchase from a brick-and-mortar store or over the web. Keep in mind that, even if you wish to process card payments through telephone, fax or postal mail, you’ll still need a merchant account to do so.

Using Payment Gateways 

The second method for accepting credit card payments is through a third-party merchant. In order for customers and clients to make a credit card purchase via your e-commerce website, on a mobile device or at a physical store, credit card processors kick off a series of steps to ensure the transaction is completed within a safe and secure environment. Third-party processors are essentially bank customers too, but they supply the payment-processing resources that business entities lack within their own operations. 

For instance, when your customer submits a credit card payment through an online shopping cart, the third-party merchant routes the customer’s data from your business to the credit card company, then back to your store. In exchange, you pay the third-party merchant a processing fee for facilitating the interchange of transactions between you and the bank, as well as the safekeeping of customers’ data.

Choose a Credit Card Processing Vendor 

There are several reputable third-party merchants that offer credit card processing services with minimal or no setup fees (though transaction costs will likely be higher compared to having your own merchant account). The following are a few that offer easy registration and competitive transaction rates: 

QuickBooks Payments

New customers can start off with a Pay-as-you-go account at no monthly fee. However, if you decide to go with QuickBooks’ monthly pricing plan at $19.95 per month, transaction fees drop from 2.4% to 1.75% per credit card payment.


2Checkout splits their pricing plans into two tiers: U.S. and non-U.S. transactions. U.S. transactions are charged 2.9%, plus a $0.30 transaction fee. For non-U.S. users, you’ll be charged at a rate of 5.5%, plus a $0.45 transaction fee. However, if you process more than $50,000 in credit card transactions per month, you may qualify for 2Checkout’s discount volume pricing plan. 


PayPal offers free signup for companies interested in using its credit card payment processing services. For U.S. credit card swipes, PayPal charges 2.7% of the transaction, plus $0.15 per order. International customer purchases are charged 3.7% per transaction.  

Additionally, there are numerous other third-party payment processors available to small businesses that provide services such as 24-hour monitoring and fraud protection, inventory management and mobile capabilities. You can visit sites like Shopify—which provides a comprehensive list of third-party payment processors it supports—to develop a shortlist of vendors to compare before choosing a payment gateway that’s right for you.