How to Accept Credit Card Payments From Customers or Renters

What it means to accept credit cards, and why the setup matters

Accepting credit card payments means you take a card number (in person, over the phone, or online) and send it through a payment processor to move money from your customer's or renter's bank account to yours. You do not handle the card details yourself — a third party does. That separation protects both of you.

The setup matters because how you accept cards changes what you pay in fees, how fast the money reaches your account, what paperwork you need, and whether you can do it from your phone or only from a computer. A landlord accepting rent online faces different choices than a small business taking payments at a counter.

You will need three things: a merchant account (permission from a bank or payment company to accept cards), a payment processor (the company that actually moves the money), and a payment method (a card reader, a link you send, a form on your website, or a phone line). Some companies bundle all three; others keep them separate.

Key Takeaways

• You need a merchant account from a bank or payment processor before you can accept any credit card, and the setup takes one to five business days.
• In-person payments use a card reader (Square, Stripe, PayPal) that plugs into your phone; online payments use a link or form that the customer fills out themselves.
• You pay a percentage of each transaction (usually 2 to 3 percent) plus sometimes a small flat fee per transaction, and these fees come out before the money reaches your account.
• Money from credit card sales typically lands in your bank account within one to three business days, not immediately.
• Keeping records of who paid, when, and how much is your responsibility — the payment processor sends you a receipt, but you must store it.

In-person payment: card readers and point-of-sale systems

If you take payments face-to-face — at a rental office, a small business counter, or a community event — you use a card reader. This is a small device that plugs into your phone or tablet via the headphone jack or USB port, or connects wirelessly. The customer inserts, taps, or swipes their card; the reader encrypts the number and sends it to the processor; and you get a receipt on your screen.

Common card readers include Square Reader, Stripe Reader, PayPal Here, and Clover. Each charges a percentage of the sale (usually 2.6 to 2.9 percent) plus a small per-transaction fee. Some charge a monthly subscription for extra features like inventory tracking or employee management; others do not. The reader itself is often free or costs $20 to $100 upfront.

You need a smartphone or tablet with internet access (WiFi or cellular data) to use a card reader. If your internet drops mid-transaction, the reader usually saves the payment and sends it once you reconnect. You should test this before you rely on it for rent collection or regular business payments.

Online payment: links, forms, and invoices

If you collect payments online — from renters who pay remotely, customers who order by email, or anyone you invoice — you send them a link or form instead of meeting in person. The customer enters their card details into that link or form, the processor encrypts it, and the money moves to your account.

You can create these links through Square, Stripe, PayPal, or specialized invoicing software like Wave or FreshBooks. Most let you send a payment link via email or text message. The customer clicks the link, enters their card number and billing address, and completes the payment without ever calling you or meeting you in person.

Online payments carry the same percentage fee as in-person (usually 2.6 to 3.5 percent), but you avoid the cost of a card reader. The tradeoff is that you cannot see the customer's face or ID, so fraud risk is slightly higher — though the processor bears most of that risk, not you. If a customer disputes the charge later, the processor investigates and decides who was right.

Setting up a merchant account and choosing a processor

To accept credit cards, you must first open a merchant account. This is a special bank account that holds credit card transactions before they settle into your regular checking account. You apply through a bank, a payment processor, or a third-party provider.

The application asks for your business name, your personal Social Security number or tax ID, your address, your bank account details, and sometimes a few months of bank statements or tax returns. Processing takes one to five business days. Once approved, you can start accepting cards immediately.

Choose a processor based on what you need: if you take payments mostly in person, Square or Stripe are simple and cheap. If you invoice customers regularly, PayPal or Wave may be easier because they let you email invoices directly. If you run a rental property and collect rent online, some landlord-specific platforms like Cozy or AppFolio include payment processing built in. Compare the per-transaction fee, any monthly fees, how fast money reaches your account, and whether the processor offers customer support by phone (not just email or chat).

Fees, timing, and what actually reaches your account

Every credit card transaction costs you money. The processor takes a percentage (usually 2.2 to 3.5 percent of the sale) plus a flat fee per transaction (usually $0.30 to $0.50). If a customer pays you $1,000 in rent via credit card at 2.9 percent plus $0.30, you receive $970.70 and the processor keeps $29.30.

Money from credit card sales does not arrive instantly. Most processors deposit funds into your bank account within one to three business days. Some offer faster settlement (same-day or next-day) for an extra fee. Weekend and holiday deposits usually wait until the next business day. Check your processor's settlement schedule before you count on the money for a bill payment.

You also need to watch for chargebacks. If a customer disputes a charge with their credit card company, the processor reverses the payment and takes it back from your account — sometimes weeks after the original sale. Keeping clear records (receipts, emails, signed agreements) protects you if you need to fight a chargeback.

Record-keeping and tax reporting

You are responsible for keeping records of every credit card payment you accept. The processor sends you a receipt for each transaction and a monthly or weekly summary, but you must store these yourself. Save them in a folder (digital or paper) organized by date or customer name.

At tax time, the processor sends you a form (usually a 1099-K if you accept a certain volume of payments) that reports your total credit card sales to the IRS. You must report this income on your tax return, even if you have not received a 1099-K. If you are a landlord collecting rent, credit card payments are still rental income and must be reported.

Keep receipts for at least three to seven years in case of an audit or a dispute. Digital storage (a cloud folder, your processor's dashboard, or accounting software) is safer than paper because it cannot be lost or damaged.

Security and fraud protection

You never see or store the customer's full card number. The processor encrypts it before it reaches you, and you only see the last four digits on your receipt. This is called PCI compliance — a set of security rules that protect card data. As long as you use an official payment processor (Square, Stripe, PayPal, etc.), you are compliant automatically.

Do not ask customers to email you their card number, text it to you, or write it on a check. Do not store card numbers in a spreadsheet or notebook. Always use the processor's official link, form, or card reader. If you do it any other way, you become responsible for protecting that data, and the liability is yours if it is stolen.

If a customer claims they did not make a payment or that the charge was fraudulent, the processor investigates. They may reverse the charge and refund the customer while they look into it. You can dispute the chargeback if you have proof (a receipt, an email confirmation, a signed agreement) that the customer authorized the payment.

Frequently Asked Questions

Do I have to accept credit cards?

No. You can require payment by check, bank transfer, or cash only. However, offering credit card payment makes it easier for customers and renters to pay on time, which can reduce late payments and collection problems.

What if a customer's card is declined?

The processor tells you immediately that the card was declined. You can ask the customer to try a different card, call their bank to ask why it was declined, or use another payment method like a check or bank transfer. The declined transaction does not charge anyone.

Can I pass the credit card fee to the customer?

It depends on your state and the card network. Some states allow you to add a surcharge (usually 2 to 3 percent) to the customer's bill if they pay by credit card. Others ban it. Check your state's laws before you add a surcharge. For rent payments specifically, some states prohibit surcharges entirely.

How do I know if the money actually arrived in my account?

Log into your processor's dashboard (Square, Stripe, PayPal, etc.) and look at the settlement history. It shows when each batch of transactions was sent to your bank and when it arrived. You can also check your bank account directly to see the deposit. If money is missing, contact the processor's support team with the transaction date and amount.

What happens if I close my merchant account?

Any pending transactions are settled first, and then the account closes. If you reopen an account later, you start fresh — old transactions do not carry over. Keep your records backed up before you close an account, because you may not be able to access the processor's dashboard afterward.