Step 1: decide how your customers will pay
You can also apply for your own merchant account instead of signing up with a processor like Square, Stripe, Clover, Shopify or PayPal. Each way of taking a card has its own price, because the card networks treat a card the customer taps in front of you as lower risk than a number typed into a website. Start with how your customers already buy from you.
| How the card is taken | Example price | On $40 |
|---|---|---|
| Tapped, dipped or swiped in person | Square Free 2.6% + 15¢ [1]; Clover Basic and Shopify POS 2.6% + 10¢ [5][3] | $1.14 to $1.19 |
| Online checkout | Stripe 2.9% + 30¢ [2]; Shopify Basic 2.9% + 30¢ [3] | $1.46 |
| Invoice paid by card | Square Plus 2.9% + 30¢, Square Free 3.3% + 30¢ [1] | $1.46 to $1.62 |
| Typed in or card on file | Square 3.5% + 15¢ [1]; Clover 3.5% + 10¢ [5] | $1.50 to $1.55 |
| PayPal button at checkout | PayPal Checkout 3.49% + 49¢ [4] | $1.89 |
If most of your sales happen face to face, a reader and a tapped card will be your cheapest route. If customers pay after the work is done, invoices fit better, and a bank transfer option on the invoice can cost far less than a card (more on that below).
Step 2: choose a provider, or your own merchant account
Square, Stripe, Shopify and PayPal let you sign up online and start in a day or two. They charge one flat rate per sale. Clover publishes its own processing rates by plan [5]. A dedicated merchant account takes longer to open and usually passes through card network costs plus a markup.
Pros
- Flat-rate provider: fast to open, no contract, one rate to remember.
- Flat-rate provider: free or low-cost readers; Square's contactless and chip reader is $59 [6].
- Flat-rate provider: good for low volume and seasonal businesses.
Cons
- Flat-rate provider: debit cards cost the same as premium rewards cards.
- Flat-rate provider: payouts can be held for review on unusual sales.
- Flat-rate provider: at steady volume, pass-through pricing often costs less.
Our page on merchant account vs Square covers when the switch pays off.
Step 3: what to have ready, and what to buy
- Your legal business name, tax ID (EIN, or SSN for a sole proprietor) and business address.
- A business bank account for deposits. Keeping card money separate makes bookkeeping and any future funding application easier.
- A description of what you sell and your average sale. Unusual answers lead to more review, not a refusal.
- For online sales: a website or store page with prices, a refund policy and contact details.
- Hardware that matches how you sell: a phone reader for mobile work, a countertop terminal for a store, or nothing at all if you only send invoices.
Buy hardware rather than signing a long lease for it. A Square Terminal is $299 outright [6]; leases on similar devices can run for years and are hard to cancel. See card terminal leases before you sign anything with a monthly equipment fee.
Step 4: the rules on minimums and surcharges
Federal law lets you set a minimum purchase for credit cards of up to $10, as long as it is the same for every card network and every bank [7]. The law speaks only to credit cards, so do not apply a minimum to debit cards.
Adding a surcharge to cover card fees is allowed in New Jersey with limits. State law says the surcharge cannot be greater than your actual cost to process the payment, and it must be posted at the point of entry and point of sale before the customer is charged, on the checkout page for online sales, and spoken aloud for phone sales [8]. Visa caps a surcharge at your processing rate for that card or 3%, whichever is lower, requires 30 days' notice to your acquirer, and does not allow surcharges on debit or prepaid cards [9].
A flat surcharge on every card breaks the rules
Because debit and prepaid cards cannot be surcharged [9], a sign that adds the same fee to every card overcharges debit customers. Use a surcharge setting that applies only to credit cards, or offer a cash discount instead.
This is general information, not legal advice, as of Oct 20, 2026. Our surcharge calculator shows the legal maximum on a sale.
Step 5: how and when the money reaches your bank
Standard payouts are free at Stripe, for example [2], but they are not instant, and the schedule varies by provider and settings. Faster payouts cost extra. Stripe charges 1.5% of Instant Payouts volume with a 50¢ minimum [2], and Clover's Rapid Deposit carries a 1.75% fee [5]. On $1,000 of sales that is $15 to $17.50 to get the money the same day.
For large invoices, a bank transfer (ACH) is usually cheaper than a card. Square charges 1% with a $1 minimum for invoice ACH payments, capped at $10 on its Plus and Premium plans [1]. Stripe lists ACH Direct Debit at 0.8% with a $5.00 cap [2], and PayPal invoices paid by bank are 1% capped at $10.00 [4]. On a $2,000 invoice, a card at 2.9% + 30¢ costs $58.30; ACH costs $5 to $20.
Keeping card data safe from day one
The safest card number is one you never see. Readers that encrypt the card at the tap, hosted online checkouts and payment links all keep card numbers off your systems, which keeps your security paperwork short.
- Never write card numbers on paper, in texts or in email. Type phone payments straight into your provider's virtual terminal, or send a payment link.
- Give each employee their own login, and remove access the day someone leaves.
- Store customer cards only inside your processor's system, and only with the customer's consent.
- Your processor may ask you to fill out a security questionnaire. Our page on PCI compliance fees explains what it costs and how to avoid non-compliance charges.
Step 6: check your first statement
After your first full month, divide total fees by total card sales. That is your effective rate, and it is the number to compare when another provider calls. Flat-rate providers will land close to their posted rate; pass-through pricing will move with your card mix.
BatchOut is our own processing service. If you would like a second look at that first statement, we will show your effective rate next to published options, and label ours as ours.