How to accept payments as a small business, online and in person

A card fee is small enough to shrug off on any single sale and big enough to matter across a year. On $8,000 a month of card sales, the gap between a 2.9% rate and a 3.3% rate is about $32 a month — nearly $400 a year — for doing nothing differently. Multiply that across every way a customer can hand you money and it becomes one of the few costs you can actually shop.

Two things make it confusing. The rate depends on how the card is paid — tapped in person, entered on your website, or typed in by hand — and those are three different prices, not one. And most articles quote a number that's already out of date. Square, the default for a lot of local shops, quietly raised its free-plan online rate in October 2025, and plenty of write-ups still show the old one.

Everything below was read straight off each company's own pricing page on July 23, 2026, and is marked vendor-direct. Where a number wasn't on the vendor's own page, it says so.

What you're actually paying for

Every card payment splits three ways. The biggest slice, called interchange, goes to the bank that issued your customer's card. A smaller slice goes to the card network — Visa, Mastercard. The processor keeps what's left as its markup. You can't shop the first two; they're the same for everyone. The processor's cut is the only part that differs, which is why the tidy “2.9% + 30¢” style of pricing exists at all: the processor blends all three into one flat number and absorbs the variation so you don't have to think about it.

The thing to carry into the table below is that the same processor charges you differently depending on how the card reaches it. A card physically tapped or dipped is cheapest — the real card is present, so fraud risk is low. A card typed into your website costs more. A card number you key in by hand costs the most, because it's the easiest to fake.

The four processors, 2026 rates

These are the four a US small business is most likely to reach for. Rates are for standard US-issued cards.

The headline: PayPal's online rate is the priciest of the four at 3.49% + 49¢ for a card entered at checkout, and Square's free-plan online rate (3.3% + 30¢) is now close behind after its October 2025 increase — the change most guides still miss. Stripe and Shopify Payments both sit at 2.9% + 30¢ online. For a card tapped in person the four are clustered tightly, roughly 2.3–2.7%, and Stripe's 5¢ per-transaction charge is the lowest of the bunch — which matters more than it looks on small tickets.

Why the same card costs three different prices

This is the part that trips people up, so it's worth being concrete. Take Square: a card tapped on a reader is 2.6% + 15¢, the same card entered on your online store is 3.3% + 30¢, and a card you key in by hand is 3.5% + 15¢. Same card, same customer, three rates — because each step further from “the physical card is right here” is a step up in fraud risk, and the processor prices that risk in.

The practical takeaway is about the most expensive one. Keying a card by hand — typing the number off a scrap of paper or reading it over the phone — is the worst rate on every processor here, and the most exposed to chargebacks. If you catch yourself doing it often, that's the signal to send a payment link or an invoice and let the customer enter their own card. You drop from the keyed rate to the online rate and hand the fraud risk back to the card networks where it belongs.

The fees that surprise people

The per-swipe percentage is the fee everyone compares. These are the ones that don't show up until they land on your statement.

Chargeback and dispute fees

When a customer disputes a charge with their bank, some processors bill you a flat fee whether you win the dispute or not: Stripe charges $15, PayPal $20. Square's published fee schedule lists no separate dispute fee. On a disputed $40 service, a $20 chargeback fee more than doubles what the mistake costs you — and disputes are more common than new owners expect, especially on keyed and online sales.

International cards and currency conversion

A card issued outside the US, or a payment in another currency, triggers surcharges most owners never see coming. Stripe adds +1.5% for international cards and +1% if the currency has to convert. PayPal adds +1.5% cross-border plus a currency-conversion spread of roughly 3–4%. For a purely local business this almost never fires. But the moment you sell online to someone traveling or based abroad, it does — so it's worth knowing the line item exists before it appears.

Monthly plans, and platform cuts that stack

Two of the four charge a monthly subscription on top of the per-swipe fee. Shopify starts at $27/mo on monthly billing (annual billing is cheaper). Square's free plan is genuinely $0/mo, and its paid plans buy you a lower rate rather than access — a real distinction.

The one that quietly costs the most is a platform cut that stacks on top of the processor. If you take payments through a website builder, the builder can skim its own percentage on top of the card fee:

• Squarespace charges 2% on every sale on its entry commerce plan, on top of whatever Stripe, Square or PayPal already took; its higher plans drop that to 0% (squarespace.com/pricing, vendor-direct).
• Shopify adds an extra 2% on the Basic plan if you use any processor other than Shopify Payments — 1% on Grow, 0.6% on Advanced (shopify.com/pricing, vendor-direct).

Run the Squarespace case through: a $100 online sale is about 2.9% + 30¢ to Stripe plus 2% to Squarespace — roughly $5.20, not the 2.9% you thought you signed up for. The lesson isn't that builders are a rip-off; it's that the checkout rate and the platform cut are two separate charges, and you have to add them before you compare. If you're weighing platforms more broadly, the same stacking shows up in our breakdown of what a small business website actually costs.

Deposits and invoices

Beyond a plain checkout button, two things a local business actually needs are a way to take a deposit and a way to send an invoice. All three no-monthly-fee processors — Square, Stripe, PayPal — do both.

Deposits. Each lets you charge a partial amount up front to hold an appointment or a booking. If you take reservations, a deposit is the single most effective no-show deterrent there is, and it works best tied straight to your booking flow rather than collected separately — more on wiring that up in online booking for a small business.

Invoices. All three send a proper invoice with a pay-online link, and on the basic tiers there's no extra invoicing fee — a card paid against an invoice costs the same as any other online payment. The cheaper path for a big job is bank transfer (ACH): Square invoices paid by bank transfer cost 1%, minimum $1, and Stripe's ACH is 0.8%, capped at $5. On a $2,000 job that's about $5 by bank transfer versus roughly $58 by card — well worth offering the bank option on anything big-ticket.

How to choose for a local business

There's no single best processor — it depends on how your money actually comes in. Four rules of thumb:

• Mostly in person (barber, café, detailer, market stall): the in-person rate and the monthly fee are what matter, and the online rate is noise. Square's free plan — $0/mo, 2.6% + 15¢ tapped — is hard to beat at low volume. Stripe's 2.7% + 5¢ edges ahead on very small tickets, where the per-transaction cents dominate.
• Mostly online, or taking bookings and deposits: the online rate dominates, so this is where PayPal-as-your-main-checkout (3.49% + 49¢) gets expensive. Stripe or Shopify Payments at 2.9% + 30¢, or Square's Plus plan, cost less on every sale.
• Does it have to live on your own website? If customers pay or book on your site, you want a processor that embeds cleanly — Stripe, Square and PayPal all do — and you want to avoid a builder that skims a platform cut on top. Price the total, not just the checkout rate, and build the fee into what you charge (see how to price your services).
• Let volume decide the monthly plan. A lower rate only pays off past a break-even. Square's $49/mo Plus plan drops the online rate 0.4 points (3.3% → 2.9%); that only saves money once you're doing about $12,250 a month in online sales. Below that, the free plan's higher rate still beats paying the subscription.

The short answer

For most US local businesses in 2026: if you take cards in person, a free plan at roughly 2.6% + a dime a swipe is the floor, and paying a monthly fee only makes sense at real volume. If you take cards online, expect 2.9% + 30¢ from Stripe or Shopify, more from PayPal, and watch for a builder or platform quietly adding a second percentage on top. Keyed-by-hand is the worst rate everywhere — design your day so you rarely need it. And the number in last year's article is probably wrong; check the rate on the vendor's own page before you commit.