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How to Accept Credit Card Payments Using Your Phone

Accepting credit card payments has never been easier for small businesses. Here is a step-by-step process for how to accept payments with your phone.

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Written by: Simone Johnson, Senior WriterUpdated Jun 09, 2025
Shari Weiss,Senior Editor
Business.com earns commissions from some listed providers. Editorial Guidelines.
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Many businesses need to accept payments while they’re on the go, making accepting credit card payments using your phone an attractive option. This guide covers how to accept credit cards and digital payment methods using your phone, as well as the costs, benefits and key considerations to keep in mind. 

Editor’s note: Looking for the right credit card processor for your business? Fill out the questionnaire below to have our vendor partners contact you about your needs.

Can I use my phone to accept credit card payments?

Yes, you can accept credit card payments on your phone by partnering with a payment processor that supports mobile payments, such as Square or PayPal. These vendors provide mobile credit card readers, apps and flexible, pay-as-you-go terms specifically for mobile credit card processing.

“Mobile card processing is especially valuable for small and medium-sized businesses that provide services on-site, such as home repair, personal training or delivery services,” said Bob Legters, chief product officer at payments platform Paysafe. “It allows businesses to go cashless, enabling customers’ payment choice and allowing businesses to collect payments in real time.”

FYIDid you know
Check out our comprehensive review of Square and our PayPal review to learn about two payment facilitators that make it easy to get started accepting mobile payments.

How to accept credit card payments on your phone, step-by-step

1. Sign up with a credit card processor or payment facilitator.

You need to open a merchant account with a credit card processor or set up an account with a payment facilitator like PayPal or Square, if you don’t already accept credit cards.

  • Credit card processors: Partnering with a full-service processor for mobile credit and debit card payments typically requires applying for a merchant account. These companies may ask for extensive business information and documentation and some businesses, such as those in high-risk industries, may not be approved.
  • Payment facilitators: A payment facilitator, such as PayPal or Square, acts as a middleman between your business and the credit card networks. These providers offer a faster, easier setup and typically don’t require underwriting or credit checks. Most businesses can start accepting payments shortly after signing up online — a great option for startups and small businesses just beginning to accept credit cards. 
Did You Know?Did you know
A study by payment processor Helcim found credit cards accounted for 22% of online transactions and 39% of in-person transactions.

2. Download the payment app.

Most processors and facilitators have their own dedicated payment app. You’ll need to download it, enter some basic business information and complete your account setup. 

Most apps are available for both iOS and Android devices and include guided setup steps to walk you through linking your bank account and customizing your payment settings. 

Some apps may also let you set tax rates, add inventory and enable tipping options — useful features for those in retail or service-based industries.

3. Get a mobile reader.

Many processors support Tap to Pay technology or provide a free mobile credit card swiper so you can begin accepting payments. Mobile credit card readers often connect to your phone via Bluetooth, though some can physically connect with a dongle as well. 

“Since [mobile credit card processors] utilize existing smartphones or tablets, they are cost-effective by reducing hardware expenses,” said Peter Galvin, chief marketing officer at payment solutions provider NMI. “Additionally, they are simple to set up, usually only requiring the download of an app and features are easy to update through the app store.”

TipBottom line
Ask your processor for a mobile card reader that supports near-field communication (NFC) mobile payments. You'll be able to accept tap cards, digital wallets and payment apps, including Apple Pay and Google Wallet.

4. Enable a virtual terminal.

A virtual terminal is typically a secure webpage hosted by your payment processor where you manually enter the customer’s credit card information.

To process a payment using a virtual terminal, you need the following details:

  • Credit card number
  • Expiration date
  • CVV (security code)
  • Customer’s name as it appears on the card
  • Billing ZIP code
  • Billing address

5. Accept your first payment.

Start accepting payments by entering the order into the virtual terminal or processing the customer’s card using your mobile card reader.

  • Mobile reader: Select or enter the customer’s items in the app, insert or tap their card, and follow the on-screen prompts to complete the mobile phone transaction.
  • Virtual terminal: Enter the customer’s payment details manually and submit the charge through the secure payment form.

6. Process a receipt.

Send the customer a receipt or print one out if you have a mobile receipt printer. Most payment apps and virtual terminals allow you to email receipts.

After the transaction settles, the money will be deposited into your bank account, minus the processor’s fee.

Did You Know?Did you know
The best credit card processors for restaurants typically provide durable mobile and POS hardware, tipping options, fast payouts and built-in tools to streamline service and reporting.

Benefits of accepting credit cards by mobile phone

Customer convenience

Few people carry cash, so accepting cards and digital payments increases convenience and helps you deliver a great customer experience.

“[Mobile phone payments] don’t just provide the best customer experience — they [help businesses] build stronger, lasting relationships with their clientele, improving their operational model and creating flexibility in how they do business,” said Matt Downs, EVP and president of Global Platforms at international payment processor Worldpay.

Flexibility

Mobile payment functionality gives you the flexibility to try out new sales channels and venues, even if your business has a fixed location.

For example, if you own a restaurant, having an Android payment app or the ability to accept payments with an iPhone allows you to process transactions at food festivals, catering events or community pop-ups.

Retailers like clothing or jewelry stores can explore new opportunities through trunk shows or pop-up shops. Even independent sales consultants can accept payments on-site when visiting client locations — no countertop hardware required.

Shorter customer wait times

Even fixed-location businesses can use mobile payment devices to speed up checkout lines. This is especially helpful for high-volume stores or during popular promotions.

When customers face a long wait to pay, some may abandon their purchase. But with cashiers using mobile payment equipment to check out customers in line, you can significantly reduce wait times and maximize sales.

Improved bill collection

Instead of chasing down overdue bills or waiting for customers to mail a check, you can accept payment at the time of service. Collecting payment on the spot saves time and money — and helps you avoid the debt collection process and write-offs from bad debt.

FYIDid you know
Service-based businesses may also benefit from accepting short message service payments. With this method, you text a customer a payment link that opens a secure, mobile-friendly payment page on their device.

How much does it cost to accept cards using your phone?

Most mobile payment processors’ rates fall between 2 and 4 percent of each transaction.

Your exact rates will depend on your processor or facilitator, their plan and pricing model, and several factors related to your business, including:

  • Monthly processing volume
  • Average transaction value
  • Industry
  • Processing history
  • Business and personal credit

Pricing models 

Pricing models vary. Payment facilitators generally use flat-rate pricing, while credit card processors often employ interchange-plus pricing or tiered pricing. 

Here’s how each pricing model works:

  • Flat-rate pricing: Flat-rate pricing is the simplest model. Flat-rate pricing is usually expressed as either a flat percentage of the transaction amount or a flat percentage plus a small per-transaction fee.
  • Interchange-plus pricing: With interchange-plus pricing, you pay what’s known as the wholesale rate plus the processor’s markup. The wholesale rate consists of:
    • The interchange fee (set by the card networks and paid by all processors)
    • The assessment fee (another non-negotiable fee charged by the card brands)
  • Tiered pricing: Tiered pricing groups transactions into three categories: qualified, midqualified and nonqualified.
    • Qualified transactions are basic credit or debit cards swiped at the POS. They have the lowest rates, usually the ones advertised by the processor.
    • Midqualified transactions typically include reward cards swiped at the POS.
    • Nonqualified transactions often include premium rewards cards, corporate cards or any keyed-in or card-not-present transactions. These carry the highest rates.

Additional fees

Full-service payment processors may also charge additional fees, including the following:

  • Monthly fees: Monthly fees, also called statement fees, cover some of the processor’s administrative costs, such as preparing monthly statements and providing customer service. These fees typically range from $5 to $15.
  • Gateway fee: If you want to accept online payments, you’ll need a payment gateway. This fee varies depending on the provider. While a flat monthly fee is usually offered, some providers also charge a small per-transaction fee.
  • Payment Card Industry (PCI) compliance: The PCI sets strict regulations to ensure your credit card transactions are secure. You’re required to certify annually as compliant and most full-service processors charge about $100 per year to support PCI certification.
  • PCI noncompliance: If you fail to comply with PCI standards, you’ll be charged this fee monthly until you certify. This fee is typically high to discourage businesses from letting their compliance lapse.
  • Monthly minimum: Some processors charge a monthly minimum, meaning you must process a certain dollar amount in processing fees each month. For example, if the monthly minimum is $25 and you only incur $12 in fees, you’ll be charged an additional $13.
  • Contract termination fees: You may be asked to sign a service contract. While month-to-month contracts are preferred, many processors require three-year terms with steep early cancellation penalties. 

“Beyond the basic pricing models, businesses should evaluate processors based on their transparency, contract flexibility and ability to scale with business growth,” Downs recommended. “Payment processors that offer customized fee structures or volume-based discounts can provide significant savings as your business expands.”

Mark Fairlie contributed to this article. 

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Written by: Simone Johnson, Senior Writer
Simone Johnson dedicates her time to educating small business owners on the best practices for both daily operations and long-term sustainability. With a longstanding passion for finance, she often guides entrepreneurs on financial matters. At business.com, Johnson covers finance topics like business loans and grants, cash flow strategies, credit card processing and payroll forms. Johnson has also profiled entrepreneurs and assisted companies with customer targeting and brand refinement. Recently, she has focused on workforce management, providing advice on helping employees set company-aligned goals, the pros and cons of employee monitoring, and more. Armed with a bachelor's degree in communications and a master's in journalism, Johnson brings a unique blend of expertise and insight to her advisory work.
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