How to Accept Credit Cards: A 2025 Guide to Lower Fees and Account Stability

Quick Answer: How Do I Get Started?

To accept cards, you need a provider to bridge the gap between your customer’s bank and your own.

• For New Businesses (<$3,000/mo): Use a Payment Service Provider (PSP) like Square or Stripe. They offer instant setup with no monthly fees.

• For Growing Businesses (>$5,000/mo): Switch to a Dedicated Merchant Account (like IntelliPay). This provides your own Merchant ID, lower “interchange-plus” rates, and significantly better account stability. Expect approval in 24–72 hours with complete paperwork.

1. Where Can I Sign Up?

You have two distinct paths for processing card payments:

Option A: Payment Service Providers (PSPs)

PSPs (Square, Stripe, PayPal) let you sign up online and process within minutes. You are “aggregating” under their master account.

• The Trade-off: They use “approve-now, verify-later” underwriting. If their automated systems flag a sales spike, they can freeze your funds instantly without a human review.

Option B: Dedicated Merchant Accounts

Providers like IntelliPay give your business its own unique Merchant ID.

• The Benefit: You undergo underwriting upfront. While this takes a few days, it results in a stable account that won’t be blindsided by automated freezes. It is the professional standard for scaling businesses.

2. The Cost: Why “Flat-Rate” Might Be Costing You Thousands

Most PSPs charge a flat rate (e.g., 2.6% + $0.10). While simple, it hides the true cost of debit cards.

Comparison: Processing $10,000 per month

• Flat-Rate PSP: ~$270/month.

• Interchange-Plus (Merchant Account): ~$180–$220/month.

The Math: About 30% of small business transactions are made with debit cards, which cost the processor far less (often ~0.5%) to handle. With a flat rate, you pay premium credit card prices for every debit swipe.

3. DIY Savings Worksheet: Are You Overpaying?

Use this formula to determine if you are overpaying. (not an interactive calculator)

An effective rate around 1.9% is aggressive but achievable for well‑priced, mostly in‑person interchange‑plus accounts; many small businesses, especially with online or rewards‑heavy volume, end up closer to 2.3%–3.0% all‑in.

4. Get Paid Faster: Next Business Day Funding

Cash flow is the lifeblood of small business.

• Standard Industry Funding: Most processors take 2–3 business days to deposit your funds.

• The “Instant” Fee: Many PSP apps charge 1.5% to 1.75% for immediate access. On a $5,000 weekend, that’s up to $87.50 just to access your own money.

• The IntelliPay Advantage: We provide Next Business Day Funding for free. As long as your batch is settled by the daily cutoff, your money is in your bank the next business day—no extra fees, no waiting.

5. Frequently Asked Questions (FAQs)

Q. Do I need an LLC to accept credit cards?

A: No. Sole proprietors can use their SSN. However, forming an LLC is recommended for liability protection as you grow.

Q. What is the difference between a Payment Gateway and a Merchant Account?

A: The Gateway is the technology that captures the data, while the Merchant Account is where the money is held before moving to your bank. IntelliPay provides an all-in-one solution for both.

Q. What equipment do I actually need?

A: For in-person, an EMV (chip) and NFC (contactless) reader is essential. For phone orders, a Virtual Terminal (a secure web dashboard) allows you to process payments from any computer.

Q. Can I pass the processing fees to my customers?

A: Yes. You can use Surcharging or Dual Pricing. IntelliPay’s platform automatically applies the correct legal rules for your state and card types.

Q. Why do accounts get frozen?

A: PSPs often freeze funds if they see a sudden sales spike or a large transaction. Because dedicated merchant accounts are vetted upfront, these “surprises” are rare, and you have a human support team to help if they do happen.

6. How to Get Approved for a Merchant Account (5-Step Checklist)

Getting your own Merchant ID involves a formal underwriting process. To ensure approval within 24–72 hours, follow these steps to prepare your documentation.

Time required: 3–5 Business Days

Tools needed: IRS EIN Letter, Bank Statements, Government ID

Step 1: Verify Your Business Legal Identity

You must prove your business is a registered entity. Gather your IRS EIN Letter (Form CP 575 or 147C). If you are a sole proprietor, have your Social Security Number ready.

Step 2: Prepare Financial History

Underwriters need to see cash flow stability. Provide the last 3 months of business bank statements. If you are already processing, provide the last 3 months of processing statements to prove your “effective rate” and chargeback history.

Step 3: Confirm Deposit Destination

To enable Next Business Day Funding, the processor must verify your bank account. Provide a voided business check or a formal bank letter that clearly shows your Business Name, Routing Number, and Account Number.

Step 4: Validate Identity & Ownership

Provide a high-quality scan of a Government-issued ID (Driver’s License or Passport) for any owner with 25% or more equity in the company. This is a standard “Know Your Customer” (KYC) requirement.

Step 5: Audit Your Digital Storefront

If you sell online, your website must be “compliance-ready” before you submit. Ensure your site clearly displays:

• A visible Refund/Return Policy.

• Contact Information (Phone, Email, and Physical Address).

• Privacy Policy and Terms of Service.

The Bottom Line

If you are processing under $3,000/month, a PSP is a good starting point. But once you cross $5,000/month, you deserve more than a “rented” account. A dedicated merchant account offers the stability, lower rates, and free next business day funding that helps your business thrive.

Reach out to IntelliPay for a no-obligation review.

Disclaimer:

Financial & Legal Disclosure: This article is provided for general informational and educational purposes only. It does not constitute legal, financial, or professional tax advice. While we strive to provide accurate and up-to-date information, payment processing regulations, card brand rules (Visa, Mastercard, Discover, Amex), and state laws are subject to change without notice. Business owners should consult with their own professional advisors before entering into any financial service agreements.

Rates & Savings: Processing rates, fee structures, and potential savings mentioned (such as the comparison between PSP flat-rates and Interchange-Plus pricing) are illustrative examples based on industry averages. Actual costs are determined by several factors, including but not limited to: your specific industry (SIC/MCC codes), monthly processing volume, average transaction size, card-mix (debit vs. rewards), and your business’s credit history.

Funding & Approval: “Next Business Day Funding” provided by IntelliPay is subject to nightly batch settlement cutoff times and bank processing holidays. Free next business day funding is a standard feature but may be subject to specific account terms. Account approval times (24–72 hours) are estimates and depend on the timely submission of complete and accurate documentation; complex business models or high-risk industries may require additional underwriting time.

Compliance: Programs such as surcharging and dual pricing are subject to state-specific laws and card brand regulations. It is the merchant’s responsibility to ensure local compliance. IntelliPay provides tools to assist with this, but availability may vary by jurisdiction.