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How to Accept Credit Card Payments

These days, if you were to look inside the wallet of any given Canadian, you would most likely see one or more credit cards. According to the 2019 Canadian Payment Methods and Trends (CPMT) Report, credit cards are among the most used forms of payments across the nation.

In fact, Canadians are the second-highest users of credit cards in the world, just after South Korea. With this in mind, it’s easy to see how accepting card payments will hold your business in good stead.

Find out how to accept credit card payments with various methods below.

Next: How to Accept International Payments

Why Accept Credit Card Payments?

Canada has a very high credit card issuance rate, meaning nearly nine out of ten Canadians possess one. Many of these Canadians will use their credit cards to pay for over 50%of their monthly bills and payments. With so many people using credit cards, you appeal to a wide-ranging customer base while providing a sought after service when you accept and receive these payment types.

What Types of Businesses Should  Accept Credit Card Payments?

Any  business can accept credit cards for payments. The decision to accept credit cards is more of a personal choice by the business. Some examples of businesses that accept credit card payments include:

  • Brick and Mortar businesses 
  • Mobile businesses such as food trucks 
  • Sole proprietors such as freelance and contract workers
  • Online businesses

As a business, you should consider accepting credit cards based on whether it makes completing transactions easy for the customer. Making sales transactions easy for the customer is essential since that is the last step of the sales funnel. 

For example, using credit card processing services from payment service providers such as Apple Pay, Square, PayPal, etc., makes payments easy for customers since they can simply tap to pay using their smartphones or cards. 

What Are Credit Card Transaction Fees?

To receive a credit card payment at your business, you will need to understand what credit card fees in Canada are attached to payment processing. Meaning, every time a customer pays you with a credit card, your business will be charged a transaction fee to process these electronic payments and receive the money in your business account for your goods or services.

As they are called, these pre-transaction fees or merchant fees will vary depending on the service provider you use to accept payments. Typically, merchants will pay fees from 0.5% to 5% of the total transaction per customer. Additionally, certain fixed fees will also need to be paid periodically, whether monthly or yearly.

Further processing fees could apply when dealing with chargebacks on a card. This is when a customer purchases something from your store and then seeks to return it, having the original charge rescinded on their card.

Online Credit Card Payments

Online payment portals offer customers a quick and convenient way to pay for a service or product through the internet. Your business will first need to create or possess a website to accept credit cards online. Take the first steps to building a website, then learn how to create a digital strategy and design a small business website.

Once you have your company’s website up and running, you’ll need to consider how your customers can pay for your goods and services, and how to process their credit card payments. Your business will need to sign up for a payment gateway service to process card payments online.

This gateway service will allow you to accept credit cards, but will also charge you the merchant transaction fees discussed earlier in this article.

E-Commerce Platforms and Credit Cards

E-commerce platforms are the perfect tool for businesses to use alongside their payment gateways. These platforms allow merchants to organize their sales data and inventory all in one place.

Using a platform that integrates with your payment systems can help you keep track of the various payment methods your customers have used for reporting purposes, and what they bought to update your inventory status.

How to take credit card payments over the phone

If offering credit card payments online is not an option, you can also take payments over the phone. Suppose your customers are interested in purchasing something from your store but cannot access it through the internet. In that case, you can manually enter in their credit card information in your payment system over the phone from your business location.

In-person Credit Card Payments

For those customers shopping in-person at your physical business location, you will need to have the proper POS system in place to accept and charge credit cards. This point of sales system is the tool used to process your customers’ payments. A cash register or card payment machine or card reader is used to complete a transaction.

If you are preparing to offer credit card payments in-store, you should also consider software that allows for contactless card payments. Contactless payment options for in-person transactions are on the rise. According to a recent Payment Canada study, due to the COVID pandemic, contactless card payments have become the go-to payment method for people who still shop in stores, with 42% of Canadians avoiding shops that do not accept contactless payment.

Mobile Credit Card Payments

Mobile credit card apps and readers allow merchants and businesses to receive payment through an added device on their smartphone. Newer technology allows tiny card readers to automatically connect with your smartphone or tablet for sleek and useful in-house card reading. You’ll need to research the various mobile apps available before opting to buy the smartphone add-on device and subscription service for processing payments.

The most used mobile app services for accepting and processing credit card payments include:

  • Square
  • Apple Pay
  • Google Pay
  • PayPal
  • Samsung Pay


Some of these apps are better suited for the customers paying in-store versus requesting payment by the merchant. Learn more about the top payment apps used in Canada today.

How Long Does it Take for Credit Card Payments to Go Through?

From the time the merchant accepts payment, to the processing and allocation of funds into the merchant’s bank account, the typical waiting period is 1 to 3 business days. Depending on the processing service your business uses, most credit card payments will reach your business account after twenty-four hours.

Benefits of Accepting Credit Card Payments

Credit card payments are the most common mode of payment today. Only 20% of all payments are said to be cash payments. People are increasingly using credit cards as their primary payment source , which makes accepting credit cards even more necessary. 

There are many benefits of accepting credit card payments. To help you see the advantages of accepting credit cards, here are a few benefits your business can see by accepting credit card payments:

  • Credit cards offer convenience in completing a transaction for the customer. Therefore, businesses that accept credit card transactions  increase in sales almost instantaneously. 
  • Businesses that accept credit cards are seen as  more legitimate than businesses that do not. 
  • Credit payments get deposited quickly and take less effort in comparison to when your business would accept checks for work done. Cheques need to be manually deposited, and you always have to  wait for them to clear.  
  • Since the pandemic, online purchases have skyrocketed. Most online payments are made using credit cards which makes accepting credit payments for online sales absolutely essential. 
  • Credit cards also offer convenience. In-person purchases can be made by simply tapping a card or through a smartphone. Customers can also save their information on their personal computer devices for quick and easy online purchases. 
  • Merchant accounts and credit card processing fees are also relatively inexpensive and worth the monetary charge for the benefits of accepting credit card offers. 

Tips for Using Credit Cards Safely

Practising good habits while accepting credit card transactions can go a long way in protecting your business from credit card fraud. In 2020 alone, credit card fraud was expected to result in $31 billion in losses. 

Here are some tips your business can follow while processing and handling credit card transactions:

Use tools like Address Verification Systems

Merchants and banks use an Address Verification System (AVS) to verify a transaction by comparing the numerical part of the customer's address with the customer's information on the file. 

Use chip readers

Instead of a magnetic stripe, EMV cards store cardholder data on a metallic chip. These chips are more secure than stripe-only cards since  specialized readers can only  authenticate them. EMV chip technology has the principal advantage of reducing fraud from counterfeit cards. 

Use CVV2 and dynamic CVV2 codes for online sales 

CVV code is the 3-digit code  printed on the back of every credit card. Dynamic CVV is an initiative by Visa that generates a new CVV code for a customer's online purchase through their Visa online banking app.

CVV2 codes are an additional security step to protect online merchants from accepting credit cards whose information was stolen in data breaches and hacks. 

Get your business insured against cybercrime 

Online hacking and theft are very widespread and common in today’s day and age. To protect your business and customer data stored in your database, you need to get cybersecurity insurance immediately. 

The insurance company, in the event of  cyber fraud, will help your company pay back any monetary damages and will also provide professional help to fix the problem. 

Use QuickBooks Online for Payments

QuickBooks Online credit card payment option also provides small businesses with an easy and accessible way to accept card payments. If your business already uses this software for accounting and bookkeeping purposes, then it’s a great way to receive credit card payments too.

Allow customers to pay with cards through electronic invoicing, or connect mobile payment apps to QuickBooks Online to enjoy seamless integration. Make your life easier and provide your customers with quick and easy checkout services with the various payment capabilities of QuickBooks. Try it free today.

Next: How to Accept International Payments

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