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How to Safely and Legally Accept Credit Cards for Your Small Business

Now more than ever, we are shifting away from cash payments and more towards credit card payments and payment applications. Credit and debit cards, as well as apps such as Venmo, Apple Pay, and PayPal have taken over the market. The recent COVID-19 pandemic further encouraged people’s mindsets for cashless payments, as they help reduce the physical transactions of dirty cash.


With the growing list of cash alternatives, small businesses are attempting to keep up with the market trends. New electronic ways to accept payments are becoming the new norm in most big cities, if not all cities. After all, over 73% of North Americans prefer card payments over cash when shopping. Now is the time to invest in your small business hardware equipment to adapt to your customers’ preferences. Below are ways to safely and legally accept credit cards for your business.

How to Safely and Legally Accept Credit Cards for Your Small Business
How to Safely and Legally Accept Credit Cards for Your Small Business

Invest in a Payment Processor

Selecting a trusted payment processor is the first thing you’ll need to do when you decide to accept credit cards for your business. The processor is what initiates the payment process and approves the customer’s credit card for the purchase. Almost instantly, the processor provider’s network technology will check the customer’s bank to confirm and allow the credit card transaction. Common providers that are vetted and trusted in the United States are Payment Cloud, Stax, Payment Depot, and Square. Although each of these payment processors has a transaction fee to facilitate the movement of funds from the customers’ bank to the business’ bank account, it’s a fee that must be dealt with in order to legally process the credit cards.


Consider a Merchant Account

A merchant account is a type of bank account specifically for businesses. These accounts were established to help facilitate the transaction and acceptance of multiple different payment methods, such as debit and credit cards, into the same bank account. Similar to the payment processors, the merchant accounts also charge a certain fee for their transaction services. A few trusted merchant accounts are Leaders Merchant Services, Flagship, and Credit Card Processing. As a small business, you do not need to have a merchant account if you have a payment service provider. There are advantages and disadvantages for choosing either route, but it depends on what you are looking for in a third-party platform to best suit your business’ needs.

Research Various Pricing Models & Negotiate Rates

While researching which type of provider your business will partner with, its good to take note of the different models each company provides, as well as the pricing differences and ability to negotiate terms and rates. There are three types of pricing options that providers will give:

1. Tiered pricing – pricing method that defines price per unit within a specific range or “tier.” The price per unit decreases once the quantity within the range/tier has been sold.

2. Flat rate pricing – pricing method that is uniform over time. This model charges the same fee for each transaction.

3. Interchange plus pricing – a pricing method that has varying fees based on the types of cards the customers use to pay with. The “plus” institutes an additional fee on top of the initial interchange transaction fee.


There is no one way to set up your payment process and merchant account. With so many options on the market available to any small business owner, it’s feasible to obtain a price model and rate that doesn’t hurt your revenue goals.


Follow PCI Compliance

As a business and franchise law firm, we urge you to follow any federal and global compliance forums that have to do with how you run your business. Specifically, Payment Card Industry (PCI) compliance is crucial to follow in order to keep your business secure and operating legally. PCI’s framework is to make sure emerging payment channels are secure from possible hackers and to increase consistency standards among payment platforms. PCI recommends that you monitor your cardholder data and payment processors consistently to ensure data security has not been breached.


If you have any questions regarding setting up your business or instating a safe and legal credit card processor, reach out to your local business attorney’s office. DYE CULIK PC is a Charlotte, North Carolina business law firm that represents small business owners and franchisees for everything from starting a business, to buying or selling a business, or even disputes and litigation with competitors, employees, and customers. If you have a question about what to do, contact us at 980-999-3557 to see how we can help you succeed. Also, stay social with us on Instagram, Facebook, and Twitter to keep up with local businesses in Charlotte!