Alternative Ways to Take Credit and Debit Card Payments

Being able to accept credit or debit card payments from customers is a necessity for most businesses. Luckily for small businesses, setting up the standard merchant account through a bank – which can be pricey – isn’t the only way to do it.

If you’re a business owner just starting out or have concerns about costs – you may want to take a look at the alternatives when it comes to processing card payments.

How card transactions work

When a customer pays for your services or products with a credit card, the system you have in place receives the data and sends it around to the financial institutions involved. It goes through the credit card network (Visa, MasterCard, Discover and American Express) and ultimately loops back to whatever processor you’re using to complete the transaction and make payment (to you).

A lot of businesses, particularly companies that do a higher volume of transactions, use a standard merchant account provider, such as a bank, which requires a merchant checking account to be set up and underwriting approval.

Standard merchant accounts

The application process to set up a merchant account for your business with a bank or financial institution can take time, and there’s a fee for setup. 

Underwriters use the application to look at your company’s history and for indicators that might flag your business as a possible risk, including things like bankruptcies.

Companies often choose to go with a bank’s merchant services because of experience and system capacity for processing a high volume of transactions. They also cite security as a plus. The charges with the standard providers can include application fees, per-transaction fees, monthly fees and currency conversion fees. As mentioned above, you’ll need to have a deposit account of some sort with the vendor, in order to receive payments.

Other Processing Options 

Instead of a standard merchant account, you could enroll your business with a “third-party processor,” also called third-party merchants, or pay facilitators (PayFacs), to handle your card transactions, online, in person or both.

Like the standard account, they check the card being used by the customer and process the payment for the transaction. They send you the payment for the amount owed, the timing of which varies by processor, ranging from immediate payment to daily to monthly.

Some small business owners like the alternative models because they can be less hassle and faster to set up, and many don’t carry startup fees or, if they do, they’re much lower than a standard merchant account. Here are five of the options popular with small business:

PayPal Here

The popular online payment service giant PayPal has its PayPal Here app, which lets you take credit card payments on site or on-the-go with your smartphone or tablet. You choose the type of card reader, from a starter reader for low-volume transactions (monthly sales under $500) to a chip-enabled card reader that can also take contactless payments. The app also lets you track sales and create invoices.

There are no setup fees, the PayPal website says, and no processing minimums. And the funds from credit card payments are deposited into your PayPal account as it processes them, usually minutes after making the sale.


Then there’s the popular Square, a company that started in 2009 with its now-familiar white Square Reader to accept card payments using a smartphone or a tablet. There’s also a Square Register that works in tandem with the Square Reader, and the company offers systems designed for Retail, Restaurants and On-the-Go. 

Square transfers funds from transactions into your bank account “as soon as the next business day” (or instantly for a fee). Your business can start taking payments within minutes of signing up, according to the Square website. 

Intuit GoPayment

Business owners who use QuickBooks might be familiar with GoPayment, the Intuit app you can use to take card payments. With Intuit GoPayment, the transactions are downloaded into QuickBooks software, automatically appearing in “real time.”

It works on your computer with a card reader that attaches to your smartphone or tablet, and payments are deposited in your checking account every night. There are no upfront costs, subscriptions, or hidden fees, according to the GoPayment website.


Stripe, launched in 2011, specializes in accepting and processing credit payments for online businesses. The company also has Stripe Connect for mobile businesses (Lyft is a Swipe Connect customer). It offers an integrated business management solution that can be tailored for any model, its website says, including on-demand businesses, e‑commerce, crowdfunding, and travel and events. There are no setup fees, monthly fees or monthly minimum fees.


Helcim has in-person, online and mobile processing, plus also offers some of the advanced solutions, such as invoicing and multicurrency processing. Its services are provided on a month-to-month basis. With Helcim Commerce, businesses can use a terminal, a card reader with a tablet or phone, or a computer. Its website says there are no introductory rates, built-in hikes, or cancellation fees.

Keep in mind, though, that nothing’s free in the payment world. Any app or service you select will keep a percentage of each transaction, averaging 2.75% for swiped transactions and more for transactions you have to enter manually.

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