How to Accept Credit Card Payments Online & Over the Phone

Wondering how to accept payments online? First you’ll need to set up a merchant account and a payment gateway.

If you’re not sure what these are –  don’t worry –  we’ve created an easy step-by-step guide to help you take payments online and over the phone.

If you want to jump ahead and start comparing quotes from merchant account providers, you can use our free comparison tool. We just need a few details about your business and we’ll find the right providers for you. You’ll then receive obligation-free quotes from these trusted suppliers.

How to take payments online

  1. Apply for a merchant account
  2. Use a payment facilitator
  3. Get a payment gateway

This article focuses solely on accepting payments online, if you want to take payments in person, dive into our handy 4-step guide.

1. Apply for a merchant account

Think of a merchant account as a kind of holding pen. It’s where funds go to be settled before they arrive in your business bank account.

Any business that’s looking to accept credit or debit cards (whether that’s in person, online, or over the phone) needs a merchant account. If you’re completely new to accepting credit or debit card payments, you’ll need to apply for a merchant account before you can get online.

Types of merchant account

Merchant accounts are either:

  • Dedicated (or traditional): This kind of merchant account exists to process your business’ transactions only. Dedicated merchant accounts offer negotiable rates and flexibility, and are ideal for businesses that process larger amounts of transactions.
  • Aggregated: This kind of merchant account is offered by providers that ‘batch’ together your transactions with those of other businesses. Ideal for small or seasonal businesses, aggregated accounts are typically easier to get approved for than their dedicated counterparts – and offer simple, flat rate pricing to boot.
  • High-risk: This kind of merchant account exists for businesses with poor credit, or those that operate in a high-risk industry such as gambling, travel, or online pharmaceuticals.

2. Use a payment facilitator

Alternatively, you can opt for an aggregated merchant account through a company known as a payment facilitator. Funky name, but you’ll certainly be familiar with the likes of Square, modern mobile card readers which are a staple on the counters of market stalls across the country.

Payment facilitators (PayFacs) are well-suited to small businesses and sole traders. They offer straightforward, flat rate pricing, charge no monthly fees, and are typically easier to apply for (Square, for instance, doesn’t run a credit check).

PayFacs are also called ‘all-in-one’ providers, because they give you the ability to take payments via multiple channels (online, in-store, over the telephone, by mail, and via invoicing) with the convenience of handling everything through a single supplier.

As for the application process, you’ll have to do it the only way most of us have these days… online. When that’s done, it’s time to get down to the real business – accepting payments online. To do that, you’ll need to get a…

3. Get a payment gateway

A payment gateway is a piece of software that authenticates and secures payments made through your website.

A payment gateway is hosted either on your website (to help maintain a consistent customer journey) or on the website of your payment gateway provider (cheaper and PCI compliant, but potentially disruptive to your customers’ user experience). Either way, it can usually be customized to fit the look and feel of your business’ colors and brand. So how do you get one?

Well, how you source your payment gateway service will depend on the type of merchant account you’ve selected. Take a look at your options below.

With a dedicated merchant account

If you’ve opted for a dedicated merchant account, a payment gateway should be available to purchase as an ‘add-on’. Most providers offer it as a service for which you’ll pay a monthly fee (typically around $25), and in return get a set amount of ‘free’ transactions (usually between 350 and 400 per month).

To reiterate, most merchant account providers offer a payment gateway. But if yours, for whatever reason, doesn’t, then stress not. You can also integrate your merchant account with a payment gateway from a third-party provider.

Many providers such as Amazon Pay specialize in such a service. Some, such as Stripe, are customizable to the extent that they’re almost a white label solution. So, if you’re tech-savvy (or have a software engineer or two at your disposal), then this could be the best option for you.

Be warned, though – this is a more complicated solution, and will probably be pricier, too. We always recommend entrusting your credit and debit card payments to a single provider, such as Clover.

With an aggregated merchant account

If you’ve opted for a PayFac such as Square, accepting payments online is a fair bit easier. That’s because – as we mentioned earlier – these companies offer an ‘all-in-one’ service. It’s a payment gateway, virtual terminal, and invoicing tool, all rolled into one.

Going down this route is surprisingly affordable, too. Unlike with certain dedicated merchant accounts (where there can be hidden fees), you’ll pay only a small fee on each transaction you accept via your website. This cost will be a bit more expensive than it would be if you were accepting card payments in person (because of the higher level of data risk involved with ecommerce transactions), but it’s still minimal.

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How to take payments over the phone

Virtual terminal

A virtual terminal is a secure webpage that allows you to accept payments over the phone. You simply log into the page from your device, enter your customer’s card details (which you’ve received either over the phone, or via mail), and take the payment. These payments are called MOTO (Mail Order/Telephone Order) transactions.

Once mainly the domain of freelancers, tradespeople, and food delivery businesses, MOTO payments might just be exactly what your SME needs to send sales back in the right direction. And they’re simple to accept, too – virtual terminals are basically an online version of a card machine.

Virtual terminals can also be used to process invoices, and you can save customer card details to speed up service. Better still, they’re totally secure – virtual terminals use AVS (Address Verification Service) to authenticate the payment, and are fully PCI compliant, too – providing, that is, that you don’t leave anyone’s card details lying around on a scrap of paper in your office.

Virtual terminals – a no-brainer, right? So how do you get one?

With a dedicated merchant account

Well, as it turns out, it’s as simple as obtaining a payment gateway. A virtual terminal is available as an optional add-on with a merchant account.

With an aggregated merchant account

If you opt for an all-in-one provider, a virtual terminal will be included as standard – no monthly fees or hidden costs in sight. However, you will pay a percentage-based fee for each transaction you accept through it. With Square, that’s 3.5% + 15¢, while SumUp will set you back 3.25% + 15¢.

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Next Steps

To take payments online you’ll need a merchant account and a payment gateway. You can purchase the payment gateway as an add-on if you have a dedicated merchant account, but if you have an aggregated merchant account, it comes included.

Now that you’ve got the 411 on how to take payments online and over the phone, it’s time to choose a merchant account.

Before choosing one, it’s important to compare various providers and we’ve made it easier for you with our free quote tool. With just a few brief details about your business, we’ll do all the hard work. You’ll then be contacted by your matched suppliers with obligation-free quotes.


How can I accept a credit card payment from someone?
To accept card payments in person, you’ll need a payment terminal or card reader. To accept payments online you’ll need a payment gateway, and to accept payments over the phone you’ll need a virtual terminal.

You can find all of these in one payment provider such as Square.

How can I accept credit card payments without a machine?
If you don’t have a card machine, you can use a QR code on your smartphone or tablet or a payment link.
What is the cheapest way to accept payments online?
The cheapest way to take payments online is to use a payment gateway.
Written by:
Zara Chechi
Zara is a Payments Expert, specialising in writing about Point of Sale systems. With a Law Degree from City University of London, she has used her legally-honed research and analytical skills to develop expertise in the Business Services world. Featured in FinTech Magazine, she quickly became an expert in payroll, POS systems, and merchant accounts.
Reviewed by:
Heleana Neil, Business Services editor
Heleana Neil specialises in Business Services, managing the strategy and production of content for SMBs, helping businesses with the challenges and opportunities they face today. Covering everything from payroll to payment processing, Heleana uses her expertise to help business owners make better, informed decisions and grow their companies.