How to accept credit card payments

Learning how to accept credit card payments sounds complicated from the outside, but it comes down to three pieces: a merchant account that lets you receive card funds, a way to actually capture the card (a terminal, app, or checkout page), and a business bank account where the money lands. Most Minnesota small businesses can be set up and taking their first payment within a few business days.

What do you actually need to start taking cards?

At minimum you need a merchant account or payment service provider account, a card-reading method suited to how you sell, and a business checking account. A merchant account is the relationship that lets Visa, Mastercard, and the rest route funds to you; the hardware or software is just the front door.

• A merchant account or payment service provider (PSP) account
• A terminal, card reader, POS system, or online payment gateway
• A business bank account for deposits (personal accounts usually will not work)
• Basic business paperwork: EIN or SSN, bank details, and an estimate of monthly card sales

What's the step-by-step process to get approved?

Getting approved is mostly paperwork and a quick review of your business type, not a credit check on you personally in most cases. Here is the typical path from application to your first swipe.

1. 1Choose a provider and compare pricing — see our breakdown of credit card processing fees before you sign anything.
2. 2Fill out an application with your business name, entity type, EIN, and estimated monthly card volume.
3. 3Submit supporting documents (see below) so underwriting can verify your business.
4. 4Get approved, usually in one to two business days for straightforward retail or service businesses.
5. 5Receive and set up your hardware or gateway, or connect a POS system you already own.
6. 6Run a small test transaction, then start accepting real payments.

What documents does underwriting ask for?

Expect to provide a voided check or bank letter, a government ID for the business owner, and basic entity documents such as your articles of organization or a DBA filing. Some processors also ask for a recent bank statement, especially for businesses with higher average tickets or a high-risk merchant account classification.

How do in-person, online, phone, and invoice payments differ?

Each sales channel needs a slightly different tool, but they can all run through the same underlying merchant account. Most providers let you mix and match as your business grows.

Card-present transactions are cheapest because the physical card and chip prove the customer is really there, which lowers fraud risk. Card-not-present transactions (online, phone, mail) cost more because the processor is taking on more risk that the sale is legitimate.

Should you accept mobile wallets like Apple Pay and Google Pay?

Yes, in most cases, because tap-to-pay and mobile wallets are now a routine part of how customers pay, not a niche extra. Nearly every modern terminal and POS supports contactless and mobile wallets at no added cost beyond your normal card-present rate.

Mobile wallets also tend to reduce chargebacks because they use tokenized card numbers and require device authentication, which is one more reason to make sure whatever hardware you choose supports tap-to-pay out of the box.

What does it cost to accept credit cards?

Total cost typically lands between 2.3% and 3.5% of each sale, plus possible small per-transaction and monthly fees. The exact number depends on your card mix, how cards are entered, and your pricing model (interchange-plus, flat-rate, or a zero-fee processing setup where the customer covers the fee).

How fast does the money actually arrive?

Most providers deposit funds the next business day, though some newer platforms offer same-day or instant deposit for an extra fee. Weekend and holiday sales usually batch out on the next business day rather than being paid the same day.

If cash flow timing matters to your business — say, a seasonal shop near the Twin Cities that does most of its volume on weekends — ask specifically about deposit speed and any fee for faster access before choosing a processor.

What is PCI compliance and do you need to worry about it?

PCI compliance is a set of security standards, maintained by the PCI Security Standards Council, that protects cardholder data. For most small merchants it means completing a short annual self-assessment questionnaire through your processor's portal and using equipment that already meets the standard.

You do not need an IT department to handle this. Modern terminals and gateways are built to be PCI-compliant by default, and a good processor will walk you through the annual questionnaire in a few minutes rather than leaving you to figure it out alone.

How do you choose between different types of processors?

Processors generally fall into two camps: traditional merchant account providers that give you a dedicated account tailored to your business, and payment service providers that group many small merchants under one master account. Traditional accounts often have better long-term pricing and support once your volume grows, while payment service providers can be faster to set up for very small or brand-new businesses.

Ask any processor you're considering how they price transactions, whether that's interchange-plus or a flat percentage, since the pricing model affects how predictable your monthly statement will be. A flat rate is simpler to understand at a glance, but interchange-plus pricing is usually cheaper once your monthly card volume passes a few thousand dollars.

What should you ask before signing a contract?

A short list of direct questions before signing can save you from a bad multi-year commitment. Get the answers in writing, not just verbally from a sales rep, so you have something to point back to if a dispute comes up later.

• What is the contract length, and is there an early termination fee?
• Is the equipment owned outright or leased, and what happens if I cancel?
• What is the exact deposit schedule, including weekends and holidays?
• Are there monthly minimums, statement fees, or PCI fees on top of the rate?
• Who do I call for support, and are they available on weekends?

What mistakes do first-time merchants make?

The most common mistake is signing up for the first offer without comparing a real, all-in fee schedule against at least one alternative. Others include leasing hardware instead of buying it, not asking about the contract length, and skipping the batch or deposit questions until money is already tied up.

• Signing a multi-year contract for a small, unbranded terminal
• Not asking whether the rate quoted is interchange-plus or a padded flat rate
• Ignoring the cancellation and early termination terms
• Choosing a provider with no local support when something breaks on a busy Saturday

How do refunds and chargebacks work once you're set up?

A refund is something you initiate to return a customer's money, usually processed in seconds through the same terminal or dashboard used for the original sale. A chargeback is different: it's a forced reversal initiated by the customer's card-issuing bank, often because of a dispute, suspected fraud, or a billing disagreement, and it can come with its own fee even if you win the dispute.

Keeping clear receipts, using signature or PIN verification when appropriate, and responding quickly to any dispute notice from your processor are the best ways to keep chargebacks rare and resolve them in your favor when they do happen.

How do you get started in Minnesota?

Setting up card acceptance in Minnesota works the same way as anywhere else, but working with a processor that understands local business patterns — seasonal retail, farmers markets, restaurants, and service trades — can make onboarding smoother. Businesses in Minneapolis, St. Paul, and across Minnesota can typically get a full quote and be approved within a couple of business days.

If you would rather skip the comparison shopping and get a straight answer on pricing and hardware for your specific business, you can book a free rate review and get a plain-English recommendation instead of a sales pitch.

What happens in the first month after you start?

The first month is mostly about confirming three things work: deposits land on schedule, your totals match your own records, and your staff can handle the odd transaction without calling you. Nothing about card acceptance should feel dramatic after week one.

Check your first few deposits against your daily close-out totals. Card money usually arrives as one lump sum per batch, and fees may be taken out either from each deposit or once at month end, depending on your account. Knowing which one applies to you saves a confusing phone call later. Then read your first full statement carefully and work out your real cost using the method in our guide to credit card processing fees.

• Run a test sale on your own card for a small amount, then refund it, so you have seen both flows before a customer needs one.
• Make sure every person who works the counter can process a refund, void an incorrect sale, and reprint a receipt.
• Save your merchant ID and support number somewhere other than the terminal itself.
• Close out your batch every single day, even on quiet days — an open batch can delay funding and cost you a worse rate.
• Set a reminder for your annual security questionnaire so you never get charged a non-compliance fee.

How do you keep chargebacks and disputes low?

Most disputes are not fraud — they are customers who did not recognise a charge or could not reach you. Fixing that is cheaper than fighting the dispute, because you pay a fee per chargeback whether you win or lose.

Use a business name on statements that matches the name on your sign, put your phone number on receipts, and answer refund requests quickly. For deposits and custom orders, get written approval of the amount before you charge it, and keep signed receipts or delivery confirmation for larger sales. If you sell online or take card numbers over the phone, keep the address verification and security code checks switched on — skipping them raises both your fraud exposure and your rate.

If your industry sees higher dispute volume by nature, such as subscriptions, ticketing or travel, read our guide on getting approved for a high risk merchant account before you apply anywhere.