Credit card processing for a small business is the setup that lets the business accept credit and debit cards and get that money into its bank account. Choosing it comes down to four things: how your customers pay you (in person, online, by invoice or over the phone), the equipment or software that fits that, the pricing model you sign up for, and whether your business is ready for the underwriting review that every merchant account goes through. There is no single best setup for every small business. The right one is the one that matches how you actually sell, and the steps below show how to work that out and get set up.
What credit card processing actually is
Every card payment travels the same path. The payment is authorized, routed by the card network, approved or declined by the bank that issued the customer’s card, and then settled. Card transactions settle in a batch, and the funds are deposited into your business bank account on your processor’s funding schedule.
Four pieces make that happen, and it helps to know which is which before you compare offers:
- The merchant account. A merchant account is a payment processing account that lets a business accept credit card and debit card payments. It is where approved card sales settle before the money reaches your business bank account.
- The business bank account. This is a separate account. The merchant account processes card payments, and the business bank account is where the funds land after settlement.
- The payment processor. The processor routes transactions between your business, the card networks and the banks.
- The payment gateway. A payment gateway takes card or bank details, protects them and sends the transaction for approval. It is used for websites, online stores, hosted checkout pages, payment links, online invoices, virtual terminals, recurring billing and card-on-file payments.
If you are new to these terms, the beginner’s guide to credit card processing walks through each one, and the list of card processing terms every owner should know is a good page to keep open while you read a contract.
Step 1: Start with how your customers pay you
It works best to decide how you get paid before you pick equipment or a provider. Nationwide Payment Systems lists the first setup step as reviewing the business model and payment needs, and the second as choosing the processing setup that fits. Before you look at any offer, write down every way money comes in:
- Customers at a counter or table, with the card in hand
- Orders on your website
- Orders by phone or email, where staff key in the card
- Invoices sent to customers who pay later
- Deposits, partial payments or repeat charges on a schedule
- Business customers who pay by bank transfer or with company cards
Depending on setup, a single merchant account may support card payments, ACH bank transfers, mobile and online payments, invoices, payment links, recurring billing, POS, virtual terminal and online checkout payments, plus customer deposits and card-on-file payments. You do not need a separate provider for each channel. A shop can run a POS at the counter and a virtual terminal for phone orders under one merchant account.
Step 2: Match the equipment and software to those payments
Once you know how you get paid, the equipment question mostly answers itself. There are three main options for in-person and keyed payments, and one for online sales.
A credit card terminal
A credit card terminal accepts payments, and that is its job. It offers no sales tax reporting, inventory tracking or accounting connection, and it does not collect customer data. For a business that only needs to take a card at the counter, that can be enough. Some businesses may qualify for a free credit card terminal from Nationwide Payment Systems.
A POS system
A POS system handles the payment plus the running of the store. It covers reporting by product, category or location, automatic state and local tax calculation, real-time inventory counts with low-stock alerts and shrinkage detection, employees, and age verification where needed for regulated products such as liquor and tobacco. A POS system can integrate directly with accounting software such as QuickBooks and with ERP systems, and it can show one dashboard across several locations. A restaurant POS handles tables, tips and menus. Nationwide Payment Systems offers a retail POS option for smaller retailers and NCR Counterpoint for larger retail.
A virtual terminal
A virtual terminal is a secure online portal for processing card payments without a physical card reader. Staff log in to a website or app from any computer with a browser and key in the payment. Many virtual terminals let staff save a payment method, issue refunds and send a receipt, and a virtual terminal can send an invoice or payment request by text or email with an option for the customer to add a tip. The NPS virtual terminal supports major credit and debit cards, Apple Pay, Google Pay and ACH or e-check payments, and physical devices can be linked to it. Keep in mind that a keyed-in or virtual terminal payment is a card-not-present payment, and card-present versus keyed-in is a factor in the rate a merchant pays.
For a side-by-side look at these three, read which one a small business needs: a card machine, a POS system or a virtual terminal.
A payment gateway for online sales
If you sell online, you need a gateway. There are a few ways to set one up:
- A hosted payment page. This is a secure checkout page run by the gateway that can carry your logo and colors. Card numbers never touch your website or servers. Payment links, QR codes and invoice pay buttons work the same way.
- An integrated gateway. This connects directly to your website, online store platform or your own software, either as a store plugin or as an API that developers build into a custom application. Gateway webhooks message your other systems about approved payments, declines, failed recurring charges or paid invoices.
- Embedded payment fields. These sit inside your page but are served by the gateway.
If you sell only online, the guide on payment gateways versus merchant accounts for an online-only small business covers that choice in detail.
Step 3: Understand the pricing model before you sign
This page is about choosing and setting up, not about what processing costs, but you cannot choose well without knowing how a quote is built. Every card fee has three layers:
- Interchange is paid to the bank that issued the customer’s card. It is set by card networks such as Visa, Mastercard, American Express and Discover, and it varies with card type, whether the card is present, industry, ticket size, risk level and whether the sale is business to business or retail. Interchange is not negotiable and is the same for every processor.
- Assessments are paid to the card networks. They are pass-through costs and are not negotiable either.
- Processor markup is the processor’s own charge. It is the only part that can be negotiated.
Those layers get packaged into a pricing model. The common ones are:
- Interchange-plus, also called cost-plus. You pay the actual interchange and assessments plus a fixed markup, and the statement shows each part separately. Nationwide Payment Systems lists interchange-plus as a transparent pricing model.
- Flat-rate. NPSONE flat-rate processing has separate card-present and card-not-present rates.
- Tiered. Transactions are grouped into qualified, mid-qualified and non-qualified tiers, with interchange and markup bundled together.
- Membership. A flat monthly fee, with interchange passed through at cost.
- Dual pricing and cash discount. The register shows one price for card and one for cash, and the price adjustment is handled automatically at the point of sale. Dual pricing must follow card-brand and disclosure requirements.
- Surcharging. Surcharging is legal in most states for credit cards but is prohibited on debit cards. Improper cash discount or surcharge programs can lead to network violations, consumer complaints and fines, so set them up to follow Visa and Mastercard rules.
Two more terms to know when you compare offers. A downgrade happens when a transaction does not meet the criteria for the lowest interchange category, and common triggers include missing address verification data, not settling within 24 hours, a missing tax ID on a business sale and the wrong merchant category code. The effective rate is your total fees divided by your total sales processed in the month. Use it to compare one quote against another.
If you sell to other businesses, ask about Level 2 and Level 3 data. Businesses that accept corporate or government cards and send enhanced data such as tax amounts, customer codes, invoice numbers and line items may qualify for lower interchange rates.
Nationwide Payment Systems does not publish one universal rate, because pricing depends on each business, and it quotes each business individually. Nationwide Payment Systems also has a savings calculator on its site. For a closer look at the line items that show up on a statement, read about the hidden card processing fees to watch for.
Step 4: Check that you are ready for underwriting
Every merchant account is reviewed before it is approved. That review is called underwriting, and it is done by an acquiring bank working through a processor. Underwriters weigh identity, licensing, what you sell, your processing history, credit and how the money moves.
What the application asks for
A merchant application may ask for:
- Legal business name, DBA name, business address, phone and website
- EIN or tax ID, owner details, and the owner’s driver’s license
- Business bank account information, usually shown by a voided check or bank letter
- Estimated monthly processing volume, average ticket size and the highest expected transaction amount
- What you sell, how you accept payments, your refund policy and your terms and conditions
- Articles of incorporation or organization, or a business registration, and a business license where required
- Prior processing statements, if you are switching from another provider
Higher-risk or larger accounts may also need financial statements, a business plan, and invoices or contracts. Owner verification is part of the underwriting and Know Your Customer process.
What gets an application approved faster
- Names that match. A merchant application stalls when the names on the application, the bank account and the tax ID do not match.
- A business bank account. Nationwide Payment Systems lists using a personal bank account instead of a business account as a setup mistake.
- A live, complete website for online sellers. It should show contact information, a refund policy, a privacy policy, terms and a shipping policy, along with real product pages.
- Honest disclosure. Do not hide products, websites or ownership to get approved, and never process payments for another business. Processing for another business is a hard stop for eligibility.
- A realistic volume estimate. An approved account usually comes with a monthly volume limit based on projected volume, and processing well beyond it without notice can trigger a review.
Common delays include missing signatures, an incorrect EIN, a bank account mismatch, a website that is not live, no refund policy and products that were not disclosed.
Sole proprietors and businesses with credit issues
Many processors accept sole proprietors who apply with their own name and Social Security number, though some higher-risk or higher-volume programs require a registered LLC or corporation with an EIN. Low personal credit may bring a reserve or a lower starting limit on a merchant account. A new legal name and tax ID generally means a new merchant account application.
Higher-risk businesses
Some industries get more review. Nationwide Payment Systems lists supplements, telemedicine, tobacco, vape, firearms-related products, adult services, travel, subscriptions and high-ticket businesses among the categories that get extra underwriting. Being considered higher risk does not automatically mean a business cannot be approved. Restricted products may need extra documents, registration or licensing, or a different acquiring bank, and Nationwide Payment Systems works with low-risk, mid-risk and high-risk businesses.
Step 5: Apply, get approved and set up
Nationwide Payment Systems lays out merchant account setup in ten steps:
- Review the business model and payment needs.
- Choose the right payment processing setup.
- Submit the merchant account application.
- Provide supporting documents if requested.
- Complete the underwriting review.
- Get approved.
- Set up equipment, gateway, POS or online tools.
- Run test transactions if needed.
- Train staff or users.
- Start accepting payments.
For the full walk-through, see the merchant account setup steps for small businesses.
How long it takes
Nationwide Payment Systems says approval time depends on business type, risk level, documents and underwriting. Its guide gives these typical ranges:
- The application itself takes 10 to 15 minutes to complete.
- Approval takes same day to 48 hours for low-risk businesses, 2 to 5 days for mid-risk businesses, and 5 to 10 or more days for high-risk businesses.
- Setup takes 1 to 2 days after approval.
- Total time to a working merchant account is usually 24 to 72 hours for most businesses.
- Once you are processing, funds typically deposit in 1 to 2 business days.
Before final underwriting, the applicant receives the final application by email to e-sign.
What setup covers
After approval, setup may include activating a terminal, installing a POS system, setting up a payment gateway, adding invoicing tools, ACH and recurring billing, and running test transactions. This is also the point to add anything you skipped at the start, such as payment links for phone orders or invoicing for repeat customers.
Step 6: Handle security and PCI from day one
PCI compliance may not be completed during the initial application, but it should be addressed soon after approval. Most small and mid-sized businesses confirm PCI DSS compliance with a yearly self-assessment questionnaire, and compliance may also require vulnerability scans and annual updates. Some processors charge a PCI non-compliance fee if validation has not been completed, so put it on the setup checklist rather than leaving it for later.
The security tools to ask about include encrypted transactions, tokenization, EMV chip card support, address verification, CVV verification, secure gateways, hosted checkout, user permissions and monitoring. Tokenization replaces stored card numbers with a stand-in value so your systems never keep the real number, and a hosted payment page keeps card numbers off your website entirely.
Questions to ask any processor before you choose
Use these to compare offers on equal terms:
- Which pricing model is this quote, and does the statement show interchange, assessments and markup separately?
- Are the card-present and card-not-present rates different, and which of my payments fall into each?
- Is there a monthly minimum, a statement fee, a PCI fee or a gateway fee?
- Can one merchant account cover my counter sales, online orders, phone orders and invoices?
- Can I accept ACH alongside cards?
- Do you support Level 2 and Level 3 data for business customers?
- What is the funding schedule?
- Does the system connect to my accounting software?
- Is any surcharge or dual pricing program set up to follow card-brand rules?
- Who do I call when something breaks, and when are they available?
Nationwide Payment Systems advises reviewing a merchant statement at least once a year, and ideally every 6 months, even after you have chosen a provider.
Where Nationwide Payment Systems fits
Nationwide Payment Systems was founded in 2001 by Allen Kopelman and David Burney and helps businesses across the United States accept payments. It sets up merchant accounts for card and ACH payments, and it helps businesses choose payment gateways, terminals, POS systems, virtual terminals and mobile options. It offers interchange-plus pricing, flat-rate pricing for select merchants, dual pricing programs and compliant surcharging, and it reviews each business individually rather than publishing one rate.
Its own payment platform, NPSONE, bundles a payment gateway, hosted payment pages, payment links by email, text and QR code, a virtual terminal, recurring and subscription billing, a RESTful API and webhooks, a WooCommerce plugin and accounting integrations. NPSONE has no statement fee, no monthly minimum, no PCI fee and no monthly ACH fee, and every plan includes U.S.-based support and API access. NPSONE Smart Invoicing adds invoices that customers can click and pay by card or ACH, with deposits and partial payments. Because Nationwide Payment Systems underwrites each merchant account, NPSONE is not an instant self-service signup.
If you are already processing, Nationwide Payment Systems asks for your recent merchant processing statements and reviews them for effective rate, fees and transaction mix. You can apply for a merchant account or book a free consultation to work through the steps on this page with the Nationwide Payment Systems team.
Frequently asked questions
How do I choose credit card processing for a small business?
Start with how your customers pay you: in person, online, by phone or by invoice. Then pick the equipment or software that fits (a terminal, a POS system, a virtual terminal or a payment gateway), compare offers on the same pricing model, and make sure your application is complete before you apply. There is no single best setup for every small business. The right one matches how you actually sell.
What is the difference between a merchant account and a payment gateway?
A merchant account is where approved card sales settle before the money reaches your business bank account. A payment gateway takes card or bank details, protects them and sends the transaction for approval. Online sales, virtual terminals, payment links and recurring billing all run through a gateway.
How long does it take to get a merchant account?
Nationwide Payment Systems’ guide says total time to a working merchant account is usually 24 to 72 hours for most businesses. Approval takes same day to 48 hours for low-risk businesses, 2 to 5 days for mid-risk businesses and 5 to 10 or more days for high-risk businesses, and setup takes 1 to 2 days after approval.
What documents do I need to apply?
Expect to provide your legal business name, address, EIN or tax ID, owner details and driver’s license, business bank account information shown by a voided check or bank letter, estimated monthly volume and average ticket, and your refund policy. Businesses switching providers are asked for their processing statements, and online businesses need a live website.
Can a sole proprietor get a merchant account?
Yes, in many cases. Many processors accept sole proprietors who apply with their own name and Social Security number. Some higher-risk or higher-volume programs require a registered LLC or corporation with an EIN.
Do I need a POS system or just a card terminal?
A card terminal only accepts payments. It offers no sales tax reporting, inventory tracking or accounting connection. If you need reporting, inventory, employee management or accounting links, a POS system covers those along with the payment.
Which pricing model shows me what I am actually paying?
Interchange-plus pricing, also called cost-plus, shows the actual interchange and assessments separately from the processor’s markup. Nationwide Payment Systems lists it as a transparent pricing model. Only the markup can be negotiated.
