Accepting credit cards is one of the first payment decisions many new U.S. businesses need to make. Whether you are launching an e-commerce site, starting a professional service company, or taking customer payments remotely, the basic requirements are similar: you need an approved payment-processing relationship, a way to capture transactions, a business bank account for settlement, and payment technology appropriate to how you sell.
The terminology can make the process appear more complicated than it actually is. Merchant accounts, payment processors, gateways, virtual terminals, POS systems, interchange, PCI DSS, and settlement all describe different parts of the payment process.
At Payment Circle, we help eligible new and growing U.S. businesses explore credit card processing solutions and merchant accounts based on their industry, transaction volume, and sales channels.
This guide explains how new businesses can start accepting credit cards, what you need before applying, how processing works, what fees to expect, and what to look for in a payment provider.
What Does a Business Need to Accept Credit Cards?
For most businesses, accepting cards requires several pieces working together.
Merchant Account or Payment Processing Account
A merchant account or processing relationship allows your business to submit eligible card transactions and receive settlement into your business bank account.
The U.S. Small Business Administration explains that businesses generally need either a merchant-services account with a bank or an account with an independent payment-processing company to accept credit and debit cards.
Credit Card Processor
A credit card processor helps move transaction information between the merchant, acquiring institution, card network, and cardholder’s issuing bank.
The processor does not simply “take the payment.” It is part of the system that communicates transaction information, receives authorization responses, and supports settlement.
Payment Technology
How you collect payment depends on how you sell.
A physical store may use a card terminal or POS system. An e-commerce business usually needs a checkout integration and payment gateway. A business accepting phone orders or manually entered payments may use a virtual terminal.
Business Bank Account
Approved card proceeds ultimately need somewhere to settle. Keeping a dedicated business bank account also makes reconciliation, bookkeeping, reporting, and underwriting easier.
The SBA recommends opening a separate business bank account once a business begins receiving or spending money.
How Does Credit Card Processing Work?
A card transaction may appear to happen instantly, but several systems communicate behind the scenes.
When a customer presents a card or enters their payment information, the transaction is submitted through the merchant’s payment system. The authorization request moves through the processor and card network toward the cardholder’s issuing bank.
The issuing bank then approves or declines the transaction based on factors such as available funds or credit, card status, fraud controls, and other account conditions.
If the transaction is approved, it can later be submitted for settlement. Funds then move through the payment system and are deposited into the merchant’s linked business bank account according to the provider’s funding schedule.
You can learn more about the payment flow on Payment Circle’s credit card processing page.
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Step 1: Open a Business Bank Account
Before applying for credit card processing, establish a dedicated business banking relationship.
Keeping business and personal money separate makes it easier to track revenue, manage expenses, prepare taxes, reconcile payment deposits, and provide financial documentation if an underwriter requests it.
Depending on your business structure and financial institution, you may be asked for documents such as your EIN, business formation records, ownership details, business address, and identification.
The exact requirements vary by bank and business structure.
Step 2: Decide How You Will Accept Credit Cards
Your payment setup should match the way customers actually buy from your business.
In-Person Payments
Contractors, medical offices, and other face-to-face service businesses may use EMV terminals, contactless payment terminals, POS systems, or mobile card readers.
Online Payments
An e-commerce business usually needs a website, online checkout, payment gateway, and approved processing account. The Payment Circle payment gateway solutions can support online transaction routing, recurring payments, reporting, and other payment functions depending on the setup.
Phone or Remote Payments
Professional services, B2B companies, call centers, and businesses taking authorized card payments remotely may use a virtual terminal. A virtual terminal typically allows authorized staff to enter payment information through a secure browser-based interface instead of using a physical card reader.
Multiple Sales Channels
Some new businesses need more than one payment channel. For example, a business might accept payments through a storefront, website, telephone, invoice, and recurring billing system. Tell your payment provider about every way you plan to accept payments so the account can be reviewed and configured correctly.
Step 3: Choose the Right Merchant Account Provider
New businesses often focus almost entirely on processing rates, but price should not be the only factor. A merchant account provider should support your industry, sales channels, expected volume, average transaction size, technology, and growth plans.
When comparing providers, consider:
- Supported industries
- Online and in-person payment options
- Pricing structure
- Gateway compatibility
- POS and hardware compatibility
- Recurring billing support
- Contract terms
- Chargeback tools
- Fraud-management options
- Customer support
- Funding schedules
- Reporting capabilities
A local retail business may need a very different payment setup from an online subscription company or professional services firm. Payment Circle focuses on new U.S. online businesses in higher-scrutiny categories, such as supplement brands, subscription services and software companies, and helps them prepare applications for high-risk merchant accounts and other merchant account solutions.
Step 4: Understand What the Processor May Ask For
Applying for payment processing usually involves underwriting. The processor or acquiring institution may review your business before approving the account.
Common information can include:
- Legal business name
- DBA or trade name
- EIN
- Ownership information
- Business address
- Products or services
- Website
- Expected monthly processing volume
- Average transaction amount
- Maximum transaction amount
- Business bank information
- Sales channels
- Owner identification
- Previous processing history, if available
A brand-new business may not have previous merchant statements. That does not automatically prevent approval.
Instead, the underwriter may rely more heavily on your business model, owner information, expected processing volume, banking history, website, transaction size, fulfillment practices, and other financial information. Businesses ready to apply can use Payment Circle’s merchant account application.
Step 5: Estimate Your Processing Volume Realistically
New businesses often need to estimate their expected payment volume. You may be asked for your expected monthly card volume, average ticket size, and maximum transaction amount. For example, if you expect to process approximately $20,000 per month with an average sale of $75, your application should reflect those realistic expectations.
Do not deliberately understate volume to make an application look safer. Likewise, avoid providing extremely high projections that your business cannot reasonably support. Processors use these estimates to understand the financial exposure and normal activity expected on the account.
Step 6: Understand Credit Card Processing Fees
Credit card processing involves several possible costs, and the exact pricing depends on the provider, transaction type, card type, risk profile, pricing model, hardware, and services used.
Interchange Fees
Interchange is part of the underlying cost of processing eligible card transactions and is associated with the card-payment ecosystem.
Processor Markup
The payment processor may add its own markup on top of underlying transaction costs.
Per-Transaction Fees
Some pricing structures include a fixed fee for each processed transaction.
Gateway Fees
Online businesses may pay a monthly or transaction-based fee for payment gateway services.
Monthly Account Fees
Depending on the provider, businesses may encounter monthly account, statement, service, compliance, or software fees.
Chargeback Fees
A disputed card transaction may result in an additional fee under the merchant’s processing agreement.
Equipment Costs
Businesses accepting payments in person may need to purchase, rent, lease, or otherwise obtain compatible terminals or POS hardware. When comparing payment providers, evaluate the complete cost of processing rather than focusing on one advertised percentage.
Step 7: Choose the Right Payment Equipment or Gateway
Do not purchase payment hardware before confirming that it is compatible with your payment processor. For in-person payments, businesses should consider modern card-acceptance technology that supports appropriate payment methods such as EMV chip cards and contactless payments.
For online businesses, a payment gateway may need to support features such as shopping-cart integrations, recurring billing, fraud tools, tokenization, reporting, customer management, hosted payment pages, or API connectivity. Payment Circle offers payment gateway solutions for eligible businesses that need to accept payments online.
Step 8: Understand PCI DSS
Payment security should be part of your setup from the beginning. PCI DSS, or the Payment Card Industry Data Security Standard, establishes technical and operational requirements designed to protect payment account data. PCI SSC states that PCI DSS applies to merchants that store, process, or transmit payment card data, regardless of business size.
The exact compliance and validation requirements can depend on how your business accepts payments. A small e-commerce business may have different responsibilities from a retail store using standalone payment terminals or a service business using a virtual terminal. You can review official PCI DSS guidance from the PCI Security Standards Council. Your payment provider should also explain which compliance requirements apply to your payment environment.
Step 9: Test Your Payment Setup Before Launch
Before processing real customer payments, test the full payment experience.
Make sure pricing, taxes, checkout, receipts, refunds, billing descriptors, order confirmations, customer-service information, reporting, and settlement all work as expected.
For online businesses, test your checkout on both desktop and mobile devices.
Customers should be able to understand what they are purchasing, how much they are being charged, and who is charging them.
A technically functioning checkout is not enough. The overall payment experience should also be clear and trustworthy.
Step 10: Monitor Your First Months of Processing
Once your account goes live, monitor your payment activity.
Important metrics can include:
- Monthly processing volume
- Average transaction size
- Declined transactions
- Refunds
- Chargebacks
- Fraud activity
- Funding
- Processing costs
- Sales growth
If your business grows significantly beyond the volume originally provided during underwriting, communicate with your provider. A sudden increase in volume or ticket size may attract additional risk review if it differs significantly from the original processing profile.
How New Online Businesses Can Accept Credit Cards
Online businesses usually need a payment gateway connected to an approved merchant-processing relationship.
The payment flow generally looks like this:
Customer Checkout → Payment Gateway → Processor → Card Network → Issuing Bank → Authorization → Settlement
Your website should also clearly display important customer information.
This may include:
- Business identity
- Contact information
- Product descriptions
- Pricing
- Shipping information
- Refund policy
- Cancellation policy
- Privacy policy
- Terms and conditions
Clear business information helps customers understand who they are buying from and can also make your business easier for an underwriter to evaluate.
Can a Brand-New Business Get a Merchant Account?
Yes. Many new businesses can apply for payment processing even if they do not have previous merchant-processing statements. Approval is not automatic, however.
A processor may consider your industry, business model, products, ownership, credit profile where applicable, expected processing volume, average ticket, website, fulfillment process, refund exposure, and financial information. If your industry or transaction profile falls outside standard underwriting requirements, you may need a high-risk merchant account instead of a conventional low-risk processing account.
How Long Does It Take to Start Accepting Credit Cards?
There is no universal setup timeline.
A straightforward application with complete business information may be reviewed quickly, while applications involving larger transaction amounts, specialized industries, complex ownership, high processing volume, or additional underwriting questions may take longer. The best way to reduce avoidable delays is to submit accurate information and provide requested documents promptly.
Frequently Asked Questions
What does a small business need to start accepting credit cards?
Most businesses need an approved payment-processing relationship, a business bank account, payment hardware or a payment gateway appropriate to the sales channel, and a payment-security setup that meets applicable requirements.
Do I need a merchant account to accept credit cards?
You need an approved card-processing relationship. Depending on the provider structure, that may involve a dedicated merchant account or another supported payment-processing arrangement.
How can a small business accept credit cards online?
Online businesses typically use a payment gateway connected to an approved payment-processing account and website checkout.
Can a brand-new LLC accept credit cards?
Yes, a newly formed LLC can apply for credit card processing. Approval and account terms depend on the provider’s underwriting criteria.
Do small businesses need PCI compliance?
Businesses that store, process, or transmit cardholder data need to understand and meet the PCI requirements that apply to their payment environment.
How much does credit card processing cost?
Processing costs vary according to the provider, pricing structure, card type, transaction method, business risk profile, gateway, hardware, and additional services.
Can I accept credit cards over the phone?
Businesses with an appropriate processing setup can use tools such as a virtual terminal to accept authorized card-not-present payments.
Can a new business get credit card processing with no processing history?
Potentially, yes. Providers can evaluate other information such as business documents, banking information, expected processing volume, transaction size, website, and business model.
Final Thoughts
Starting credit card processing is easier when you break the process into a few clear decisions.
First, decide how customers will pay. Next, choose a processor that supports your business model. Then select compatible payment technology and understand the security and account requirements that apply to your setup.
Do not choose a payment provider based only on one advertised rate. Look at the full relationship, including pricing, technology, customer support, funding, fraud tools, chargeback support, and scalability.
Payment Circle helps eligible U.S. businesses explore credit card processing, merchant accounts, online payment gateways, and remote payment solutions.
Ready to start accepting credit cards? Apply for a merchant account or explore our credit card processing solutions.
You can also review our Merchant Accounts, Payment Gateways, Virtual Terminal, and complete Payment Solutions.
Sources & Further Reading
- U.S. Small Business Administration – Launch Your Business
- U.S. Small Business Administration – Open a Business Bank Account
- PCI Security Standards Council – PCI DSS
- PCI Security Standards Council – Merchant Resources
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