Credit card processing for small business: The complete guide

• The global credit card processing market is worth $150 billion in 2025 and is expected to reach $280 billion by 2033 according to Ramp.com.
• Coinlaw reports that US credit card transaction volume has grown 9.7% year-over-year.
• Clearly Payments notes that 82% of US adults now hold at least one credit card, while Gen Z card ownership has climbed from 50% in 2021 to 67% in 2025.

Customers now expect to pay with cards, whether they’re shopping online, at a market stall, or in a café. Accepting credit card payments can make your business more accessible and more profitable. It opens the door to spontaneous purchases and smoother customer journeys.

Card payments also tend to increase average transaction value. That matters for small businesses looking to maximise each sale. And as contactless and digital wallet use grows, cards remain a central part of modern payment preferences.

Unlike large enterprises with dedicated payments teams, small businesses often have to manage everything from setup and tech to security without much support. Choosing the right provider is a step towards simplifying that.

Types of credit card payments

Credit card payments typically fall into two categories: in-person and card-not-present. The differences between them impact how payments are authorised, the equipment required, and the level of fraud risk. Here's a quick comparison:

Each method involves different risks, hardware, and user behaviours. Many small businesses benefit from offering both card-present and card-not-present options to meet diverse customer expectations.

How credit card processing works

Understanding the full credit card payment journey gives you clarity on what happens behind the scenes—so you can make better decisions about the providers and tools you use. Here’s a breakdown of the typical steps:

1. Customer initiates payment
   At checkout (online or in-store), your customer enters their card details or taps/inserts their card.
2. Payment request is submitted
   The payment terminal or online gateway encrypts and sends the transaction details to your payment processor.
3. Processor contacts the card network
   The processor forwards the transaction to the card network (e.g., Visa, Mastercard or Amex), which then routes it to the cardholder’s issuing bank.
4. Issuer approves or declines the transaction
   The issuing bank checks for sufficient funds, possible fraud, and card validity, then sends an approval or decline response back through the network.
5. Merchant receives response
   Your system (POS or website) receives the result. If approved, the sale completes and the customer gets a confirmation.
6. Batching and settlement
   Approved transactions are grouped into batches and sent to your processor, usually once daily.
7. Funds are transferred
   The processor initiates settlement: the funds move from the issuer to the acquiring bank and finally into your merchant account.
8. You receive the payout
   After any processing fees are deducted, the net amount is deposited into your business bank account, typically within 1 to 3 business days.

Each transaction touches multiple parties, and delays or failures can occur at several points. That’s why it’s worth choosing a provider with reliable infrastructure and built-in fraud prevention.

Key roles in the process

• Cardholder: Your customer
• Merchant: You
• Payment gateway: Facilitates online transactions
• Processor: Routes the transaction through the card networks
• Card networks: Visa, Mastercard, etc.
• Issuing bank: The customer’s bank
• Acquiring bank: Your bank or the one managing your merchant account

Payment processing components every small business needs

Merchant account

You can either open a dedicated merchant account or use a bundled solution that combines this with your payment gateway.

Payment gateway and processor

For online payments, a gateway securely transmits card data. The processor handles authorisation and fund transfers.

Hardware and software

• POS systems: Physical terminals for in-store payments
• Card readers: For swipe, dip, or tap
• Virtual terminals: For manual entry during phone orders

Choosing the right credit card processing provider

Selecting a credit card processing provider is one of the most impactful financial decisions you'll make as a small business. While fees are often the first consideration, the real value lies in the combination of features, flexibility, and long-term fit. You need a partner that aligns with how and where you sell.

Look at how quickly a provider can get you up and running. Some offer instant account activation with pre-integrated tools; others may take longer, especially if custom development is involved. Consider how much of the setup you can manage on your own, and whether they offer support or onboarding assistance.

Then there’s pricing. Models vary, but most fall into flat-rate, tiered, or subscription categories. Flat-rate fees are easier to predict, while tiered models can be opaque and harder to track. Subscription-style pricing, where you pay a monthly fee for lower per-transaction costs, may suit businesses with high volume. Whatever the model, keep an eye out for hidden charges—such as fees for chargebacks, rented hardware, or access to certain features. In 2025, the average fee sits between 1.5% and 3.5%, with Visa and Mastercard transactions averaging 1.82%.

Support for multiple payment methods is also crucial. A good provider should allow you to accept major credit cards, contactless payments, digital wallets, and offer multi-currency support if you sell internationally. This flexibility helps you meet your customers where they are, without needing additional integrations.

Finally, consider whether the platform can grow with your business. Will it integrate easily with your point-of-sale, inventory, or e-commerce systems? Can it support recurring billing if you introduce subscriptions? The best providers make it easier to scale, not harder.

Security and risk management in credit card processing

Security is an essential part of managing costs, customer trust, and business continuity. Fraud and data breaches can have lasting consequences, especially for small businesses. That’s why a robust approach to security is just as important as pricing or ease of use.

Fraud detection and prevention tools

Look for tools that automatically monitor transactions for irregular behaviour, such as sudden high-value purchases, unusual locations, or mismatched customer data. Advanced systems use machine learning to adapt over time, becoming more accurate as patterns shift. The best tools prevent fraud without blocking legitimate customers or adding friction to checkout.

PCI DSS compliance and data protection

PCI DSS (Payment Card Industry Data Security Standard) compliance is essential for any business handling card payments. A good provider will maintain PCI compliance on your behalf, minimising your scope of responsibility. This means your systems don’t need to store or transmit sensitive cardholder data, reducing liability and making audits easier.

Data should be encrypted both in transit and at rest. End-to-end encryption helps prevent interception, while strong access controls limit who can see or process payment data within your team.

Tokenisation vs storing cards on file

Tokenisation replaces sensitive card data with a non-sensitive placeholder, or "token". If a tokenised record is breached, the data is useless to attackers. This approach is essential if you’re offering one-click checkouts or recurring billing, where cards are kept on file for future use.

By contrast, storing full card numbers yourself means you must meet strict PCI requirements and assume the risk of potential breaches. Most small businesses benefit from using a tokenisation service provided by their payment processor.

Cards-on-file for recurring payments

Offering cards-on-file can improve retention and convenience for your customers. But storing those cards, even as tokens, comes with added responsibilities. Ensure your provider supports automatic re-authentication, expiry tracking, and secure card updater services to maintain continuity without exposing your business to risk.

Also consider fraud risks around subscription services. Are there velocity checks or 3D Secure triggers for high-risk accounts? A well-rounded provider will include these features by default.

A comprehensive security setup protects more than just your bottom line, it builds customer confidence, keeps operations smooth, and helps your business scale safely.

Best practices for small business credit card processing

• Offer contactless and digital wallet options to meet growing customer preferences for speed and convenience.
• Keep the checkout process simple and fast. Fewer fields and faster load times reduce cart abandonment.
• Regularly monitor your processing fees and chargeback rates. Unexpected increases might signal pricing changes or security issues.
• Use fraud prevention features that balance risk management with customer experience.
• Stay current with your provider’s updates. New tools or features may become available that can improve performance or reduce costs.
• Train your team on how the payment system works, including how to handle declined transactions, refund requests, or manual entries.
• Review transaction data and performance analytics regularly to identify trends, peak hours, or recurring problems.
• Ensure your checkout pages are mobile-friendly, secure, and clearly show accepted payment methods.
• If you offer subscriptions or recurring billing, use tokenisation and automated card updater tools to reduce churn and payment failures.
• Communicate transparently with customers about payment options, security measures, and what to expect post-purchase.

How Antom supports small businesses in accepting card payments

Antom makes accepting card payments simple, online, in-store, or both. A single integration gives you:

• Acceptance across all major card types, wallets, and local payment methods
• Built-in PCI DSS compliance and AI-powered fraud protection
• Transparent pricing with no surprise fees
• Tools for recurring billing, auto-debit, and subscriptions
• POS, virtual terminal, and mobile-ready checkout support

You can go live quickly using Antom’s dashboard, and settle funds in your preferred currency.

Bottom line

Card acceptance is a must-have for small businesses. Whether you're just starting out or ready to simplify what you already use, understanding how it works puts you in control.

Antom brings together everything you need to accept credit cards without complexity. Speak to a payments expert and start processing credit card payments that suit your business and your customers.