Should my small business accept credit card payments?

Sometimes a purchasing decision comes down to convenience. When you accept credit card payments, you make buying easier for customers, which can lead to more sales. But, for businesses — especially small businesses and startups — there are several factors to weigh when you’re trying to decide whether or not to accept credit cards. Understanding the credit card processing fees that small business owners face is a key part of that decision. 

By accepting credit cards, you’ll add moving parts to your business operations and accounting processes, as well as fees that cut into your profit margin. So, it’s no surprise that many founders ask, “Is it worth it to accept credit card payments?”

This guide breaks down how credit card processing works, what fees to expect, and what to consider before deciding what’s best for your business and your customers.

Understanding the ins and outs of credit card processing fees for small businesses can help you make more informed choices about when and how to accept card payments. When a customer taps a card or enters their details online, it triggers a secure chain of events that moves both data and money. Knowing what happens behind the scenes can help you understand where costs come from — and what to expect from a payment provider.

The key players

All credit card transactions pass through several key players. Each of these entities has a specific role in moving money from your customer’s card to your business account:

• Your customer’s bank (the issuer): The issuer approves or denies the transaction and sends the funds.
• The card network: The card network connects banks and sets base rates.
• The payment processor: The payment processor routes the transaction, charges a fee, and deposits your money.
• Your business account: This is where the funds finally land.

The process, step by step

Every step in the chain carries a small cost, affects how quickly money hits your account, and adds time to your month-end reconciliation. Here’s how the credit card payment process works:

• Step 1: The customer pays through your POS or online checkout.
• Step 2: The card network (such as Visa, Mastercard, etc.) checks funds and flags potential fraud.
• Step 3: The transaction is approved within seconds.
• Step 4: Your processor batches and settles the day’s payments.
• Step 5: Funds, minus fees, arrive in your business account in one to three business days.

Maintaining control over your finances

Accepting cards introduces a few more layers to your financial workflow. Having visibility into when payments arrive, which fees apply, and how these fees affect your balance helps you stay in control. Mercury connects your banking and financial tools so you can see payments, expenses, and transfers in a single dashboard. This visibility helps you make smarter, day-to-day financial decisions.

Each payment you accept comes with small charges that add up. These fees usually fall into one of three categories:

• Interchange fees: These are fees paid to your customer’s bank for approving and funding the transaction — and they’re usually the biggest slice of the transaction-fee pie.
• Assessment fees: The card networks charge these fees for using their system.
• Processor margins: Processor margins are the payment provider’s markup on top of base costs. 

These fees aren’t arbitrary; they cover the cost of maintaining global payment networks, security layers, and fraud prevention systems that protect both your business and the cardholder. In other words, part of what you’re paying for is reliability, since the fees fund the infrastructure that lets money move securely in seconds. Understanding credit card fees for businesses is essential to making sure that these costs don’t eat into your margins. 

Some processors roll everything into a flat rate, which might seem like a simple, straightforward approach, but it can hide what you’re really paying. Others use interchange-plus pricing, which shows base fees and a clear markup. This structure often scales better as your sales grow. 

For product-based businesses with slim margins, credit card processing costs add up fast. Service-based businesses usually have more cushion but still benefit from watching how fees change as volume or payment methods shift.

The goal isn’t to get rid of fees (and that’s not realistic if you want to accept credit cards), but to understand how they fit into your business’ finances and pricing strategy.

As a small business owner, you may wonder, “Can a business charge a credit card fee without upsetting customers or breaking the rules?” The answer depends on state laws and card network policies.

In many cases, the answer is “yes” — but the details matter. Both state laws and card-networks rules set limits on this practice. In some states, businesses can add a small surcharge to offset processing costs. In other states, laws prohibit this.

Know the rules

Surcharges are legal in most states, though a few still restrict or ban them. Where surcharges are allowed, you’ll need to notify customers up front by posting clear signs or messages before checkout. You’ll also need to ensure you’re only applying surcharges to credit cards, since debit and prepaid cards can’t be charged extra.

Because these rules vary, it’s worth double-checking your state’s regulations before implementing any fees.

Best practices for customer trust

Transparency helps keep customers on your side. To maintain customer trust, offer no-fee methods (like ACH or debit cards), explain that surcharges cover processing costs, and stay consistent — no surprise add-ons at checkout. When done thoughtfully, passing on fees can protect your margins without undermining trust.

Accepting credit cards makes payment easy for customers, but it also comes with trade-offs for your business. 

On the plus side, accepting cards builds credibility. Customers expect it, and it signals stability, whether you’re selling online or in person. A smooth checkout process can also increase conversion, and card payments clear faster than paper checks, which improves cash flow.

The downsides are predictable, but real: Fees take a percentage of every sale, chargebacks can pull funds unexpectedly, and reconciliation can get messy if your systems aren’t connected or synced. For most customer-facing companies, accepting credit cards is worth it. For B2B or invoice-driven operations, it may make sense to wait until your business has a true reason to accept credit cards.

Fees are a cost of doing business, but you can manage them. When you understand how credit card fees for business operations add up, you can take small steps to reduce the impact without disrupting sales.

Set a minimum purchase amount for card transactions, so small sales don’t get eaten up by fixed processing costs. Offer a modest discount for bank transfers or ACH payments to encourage lower-fee payment methods. Also, review your processor’s pricing every so often, since rates that fit at launch might not fit as your volume grows. This review process is one of the best ways to keep small business credit card processing fees from eating into your margins.

Keep tabs on fees without adding work

Manually tracking costs makes it easy to miss patterns. Mercury’s integrated spend tracking and accounting automations pull payments, expenses, and reconciliations into one view, which updates automatically as transactions happen. This visibility helps you spot where fees are cutting into margins, so you can adjust before they do damage.

If you’ve decided that accepting credit cards is the right call for your small business or startup, take a little time to properly set things up:

1. Pick a processor. Go with a credit card payment processor with transparent pricing and no hidden markups. 
2. Review contract terms. Be sure to read the policies around chargebacks and settlement timelines. 
3. Ask about reporting tools. Good providers give you clear dashboards showing fees, transaction types, and payout timing, so you can see exactly where costs are coming from.
4. Connect your payment tools to your accounting software. When transactions sync automatically, reconciliation goes faster and you’ll get a clearer picture of your cash flow. Consider integrating these systems into your monthly reporting process, so fee tracking becomes routine, rather than reactive.

Finally, keep an eye on transaction values, monthly fees, and payout timing. A quick monthly review will help you understand your business’s current costs and make adjustments as needed. 

Paying credit card fees isn’t fun, but these fees don’t have to take a big bite out of your margins. Understanding how processing works and where the money goes will help you make clear, informed decisions.

The aim isn’t to avoid fees altogether — it’s to keep them in perspective. When you have a clear understanding of your startup’s true costs, you can plan around them, protect profitability, and grow, all with fewer surprises.

Ready to get a clearer view of how money moves through your business? Contact us to learn how Mercury helps founders track payments, manage fees, and stay in control of their margins and customer experience.