Steps for Accepting Credit Cards and Debit Cards

1. Step 1:

   Determine if Accepting Card Payments is for You

   Choosing to accept debit and credit card payments is a big step, but often a necessary one when running a successful business. Should your business accept debit and credit cards? To answer that question, you’ll need to understand the associated costs and benefits of card payments and laws that regulate their use. To better inform your decision, read these resources from Business.gov before you get started:

   • Will That Be Cash or Credit?
     Pros and cons of accepting cash only and card payments
   • Accepting Checks
     Quick guide to accepting checks as a form of payment
2. Step 2:

   Understand the Difference Between Credit and Debit Cards

   Credit and debit may sound similar, but they are actually two very different processes. Credit cards allow customers to make purchases by drawing on their reserved line of approved credit. Debit cards let customers make purchases by withdrawing funds directly from their personal checking account. Before your business begins accepting credit or debit cards, make sure you know the ins and outs of each. Read Accepting Credit Cards vs. Debit Cards to determine which forms of payment are best suited for your business.

3. Step 3:

   Understand Applicable Laws and Regulations

   Businesses that accept card payments must comply with certain privacy laws that aim to protect customers:

   • The Fair Credit Reporting Act is the federal law that is the foundation of consumer credit rights. This law regulates the collection and use of consumer credit information by businesses.
   • The Fair and Accurate Credit Transaction Act (FACTA) was passed in 2003 as an amendment to the Fair Credit Reporting Act. FACTA updated consumer credit protections, including a requirement for businesses to truncate consumer credit card information on receipts.

   Many states have laws that dictate what kind of information businesses can and cannot ask for or write down when a customer makes a transaction using a credit card. For more information on your state's regulations, visit your state attorney general's website and read more about state merchant laws.

4. Step 4:

   Open a Merchant Account

   For a business to accept credit and debit card payments, it must set up a Merchant Account. A Merchant Account directs funds into a designated "bank" account where all credit and debit card transactions are verified and approved.  This process allows your businesses to accept card payments directly from customers.

   If you're already in business and have a reliable sales history, you should be able to get a Merchant Account from your personal bank or through another financial institution that specializes in e-commerce. If you're just starting up or don't have a sales history, you may need to work with an independent sales organization (ISO) that acts a reseller, or middleman, between your business and the account processor.

5. Step 5:

   Install Processing Equipment

   Next, you'll need to install the necessary processing equipment, such as a credit card terminal, that will enable you to physically make card transactions. Rates and features often vary from product to product so it's important to research the best equipment for your business needs.

   Older equipment models, like manual processors that imprint card data on carbon paper, are still used by many businesses.  It's important to remember that manual processors are also susceptible to security risks. You are equally responsible for protecting consumer data whether you use older models or the newest technology.

   Once you identify the right products and have them installed at your business location, you're ready to start accepting card payments.

6. Step 6:

   Begin Accepting Credit Cards

   When you're ready to accept credit cards, make sure your customers know about it! Place stickers for accepted credit card companies on the door of your business and inform your customers of their new payment options through a marketing campaign.