In this article
A business accepts payments by opening a business bank account and then adding, one at a time, the methods its customers actually use: cash and cheque, bank transfer, direct debit, cards through a merchant account or a payment facilitator, digital wallets, invoices with a payment link, and onchain payments. Each method asks for a different setup, pays you at a different speed, charges on a different structure, can or cannot be reversed, and leaves a different record, so the choice follows from what you sell and to whom.
Rules on reversals, onboarding checks and card security are set by each country and each payment scheme. This guide gives the general mechanics, names the rule and its jurisdiction where a figure is quoted, and is general information rather than legal, tax or accounting advice.
Most businesses end up with two or three methods, not seven. The sections below take the methods on the same criteria, then cost three mixes with labelled illustrative rates.
Figures read from Nacha, the European Payments Council and FinCEN; each is explained in its section below.
What are the ways a business can accept payments?
A business can accept payments through seven families of methods: cash and cheque, bank transfer, direct debit, card payments, digital wallets, invoices carrying a payment link, and onchain payments. The first table compares what each one requires before the first payment, how long the money takes to reach your account, and how the cost is built.
Cost structure matters more than the headline rate. A method charges in up to three ways at once: a fixed amount per payment, which weighs on small tickets; a percentage, which weighs on large ones; and a monthly charge, which weighs on low volume. Reading a price list means finding all three.
| Method | What you set up | When the money arrives | Cost structure |
|---|---|---|---|
| Cash and cheque | A till, a deposit routine, a bank that takes deposits | Cash at once; a cheque after it clears, in days | Deposit and handling charges, staff time |
| Bank transfer | A business account; your details on every invoice | From seconds on instant schemes to a few business days | Often nothing to receive; a fixed charge on some incoming wires |
| Direct debit | A scheme agreement through a bank or provider, plus a signed mandate per customer | Days after the collection date | Low percentage or small fixed fee; a fee per failed collection |
| Cards via a merchant account | An underwritten account with an acquirer, a terminal or gateway | On the acquirer's payout schedule, in days | Percentage plus fixed per payment, plus monthly charges |
| Cards via a payment facilitator | A sign-up with a provider that accepts cards on its own master account | On the provider's payout schedule, in days | Percentage plus fixed per payment, usually no monthly charge |
| Digital wallets | Switched on inside your card setup or a wallet provider's account | Same as the card or balance behind the wallet | Same as the underlying card, or the wallet's own percentage |
| Invoice with a payment link | An invoicing tool connected to a card or bank payment provider | Depends on the method the customer picks | The fee of the method picked; sometimes a tool subscription |
| Onchain payment | A wallet address you control, and a way to convert if you need bank money | Minutes or less once confirmed | Network fee paid by the sender; a conversion cost if you cash out |
A digital wallet is a way of presenting a card or an account balance, not a separate rail: a phone tapped at your terminal is normally a card payment, priced and settled as one.
Which payments can be reversed, and what record does each one leave?
Card payments and direct debits can be reversed by the payer's side for weeks or months after you were paid, while a completed wire and a confirmed onchain payment are final, and cash is final once you have checked the notes. Reversibility protects customers; for the business it is a liability that stays open after the sale.
| Method | Can the payer reverse it? | Record it leaves |
|---|---|---|
| Cash | No, once accepted | Only what you write: a till receipt and a deposit slip |
| Cheque | Yes: it can be returned unpaid after you deposit it | A cheque image and a bank statement line |
| Bank transfer | Rarely: a completed credit is pushed by the payer and hard to recall | A statement line with the payer's name and reference |
| Direct debit | Yes: the scheme gives the payer refund rights | A mandate, a collection file and a statement line |
| Card or wallet | Yes: the cardholder can dispute through the issuer | Provider report per transaction, and a net payout on the statement |
| Payment link | As the method behind the link | The invoice marked paid, plus the method's own record |
| Onchain payment | No: a confirmed transfer cannot be recalled | A public transaction record with amount, time and both addresses |
Three of those rows rest on published rules. The Federal Reserve describes a transfer over its Fedwire Funds Service as immediate, final and irrevocable once processed. Under the Nacha Rules, which govern the ACH network in the United States, a consumer's bank can return an unauthorised debit for 60 days counted from the settlement date of that payment, and a business that sent an erroneous entry has five banking days after settlement to reverse it, for a short list of reasons such as a duplicate or a wrong amount. In the euro area, the European Payments Council's rulebook for SEPA Core direct debits gives the payer eight weeks to ask for a refund without giving any reason, and up to 13 months when the collection was not authorised; under the separate business-to-business scheme the payer has no refund right on an authorised collection.
A record is worth as much as the reference it carries: a transfer quoting your invoice number matches itself to the invoice, while one marked only with the payer's trading name can take a phone call to identify. Which methods are final, and why, is the subject of a separate article on payments that cannot be reversed.
Who is in the chain of a card payment?
A card payment passes through four parties besides you and your customer: the acquirer, the processor, the card network and the issuer. Knowing who each one is explains every line of a card statement.
The issuer is the bank that gave your customer the card and that decides within moments whether to approve the payment. The card network is the scheme whose logo is on the card; it carries messages between banks and writes the rules everyone else follows. The acquirer is the bank or licensed institution that holds your merchant agreement, receives the money from the networks and owes it to you. The processor is the technical party that moves the messages for the acquirer; it may be the acquirer itself or a separate firm. Online, a gateway is the software that passes card details from your checkout to the processor.
- AuthorisationYour terminal or checkout sends the card details and the amount through the processor and the card network to the issuer, which approves or declines. An approval reserves the amount on the cardholder's account; no money has moved yet.
- Capture and clearingAt the end of the day, or at once for some online sales, the approved payments are sent as a batch. The network works out what each issuer owes each acquirer.
- Settlement between banksIssuers pay acquirers through the network's settlement process, net of the interchange fee the issuer keeps.
- Payout to youThe acquirer or the payment facilitator pays your bank account on its schedule, net of its fees or with fees billed separately, depending on your contract.
- Dispute windowFor a period set by the network's rules, the cardholder can dispute the payment through the issuer. The amount is taken back from you while the dispute is examined, and you answer with evidence through your acquirer or provider.
The price you pay for a card payment is the sum of three layers: interchange, which goes to the issuer; a scheme fee, which goes to the network; and the margin of your acquirer or provider. Some contracts show the three layers separately and some blend them into one rate; how to bring the total down is covered in the guide to reducing payment processing fees.
Merchant account or payment facilitator: which one do you need?
A merchant account is your own contract with an acquirer, while a payment facilitator accepts cards on a master account it holds with an acquirer and signs you up as a sub-merchant under it. The first takes longer to open and tends to cost less per payment at volume; the second is quicker to open and tends to charge one flat rate with no monthly fee.
With a merchant account, the acquirer underwrites your business before the first payment: what you sell, how you deliver, your expected volume and average ticket, your refund policy. In return you get a rate and limits set for your real activity.
With a payment facilitator, most of that review happens lightly at sign-up and continues afterwards, so questions can arrive after you have started trading: a request for documents, a payout held while an unusual payment is reviewed, a reserve kept against possible disputes. The facilitator is liable to its acquirer for what you sell and manages that risk as it goes. If you know a large payment or a seasonal spike is coming, tell the provider before it arrives.
The fixed part of a flat rate is why small tickets are expensive to accept by card. The chart applies one illustrative facilitator rate, 2.9% plus $0.30 per payment, to four ticket sizes.
Illustrative rate, not a market quote. Fee = 2.9% of the sale plus $0.30, divided by the sale.
What checks will a payment provider run before you can accept payments?
A bank or payment provider will verify who you are, who owns and controls the business, what it sells and how much it expects to process before it lets you accept payments. These checks are legal duties for the provider, not a judgement on you, and having the documents ready is the fastest way through them.
In the United States, FinCEN's customer due diligence rule requires banks and certain other covered financial institutions to identify and verify their customers, to identify and verify the beneficial owners of companies opening accounts, to understand the nature and purpose of the relationship, and to monitor it on an ongoing basis. Under that rule a beneficial owner is any individual who owns 25 percent or more of the legal entity, together with an individual who controls it. Other jurisdictions apply their own versions of the same idea.
Expect to be asked for the following:
- Company formation documents and a registration or tax number.
- Identity documents and home address for each owner at or above the threshold, and for the person who controls the company.
- A description of what you sell, your website or premises, and how and when customers receive what they paid for.
- Expected monthly volume, average payment and largest expected payment.
- Your refund and cancellation terms, as shown to customers.
- A business bank statement or a voided cheque for the payout account.
- Any licence your trade requires.
Two details delay more applications than any other: the name on the bank account must match the legal name on the application, and the activity you describe must match what your website shows. Delivery long after payment, such as deposits for made-to-order goods, is examined closely because the provider carries the dispute risk until you deliver.
What are your security duties when you handle card data?
A business that accepts cards must protect cardholder data to the Payment Card Industry Data Security Standard, known as PCI DSS, and the simplest way to meet that duty is to never see, store or transmit the card number yourself. The standard applies to every entity involved in payment processing, small merchants included.
The body behind the standard describes its own role narrowly. The PCI Security Standards Council presents itself as a global forum for the ongoing development of payment security standards, founded in 2006 by five card networks, whose role is to enhance global payment account data security by developing standards and supporting services. The Council states that it does not enforce compliance and does not monitor how the standards are implemented: whether a business must comply, and how it must prove it, is at the discretion of the organisations that run compliance programmes, such as a payment brand or an acquirer. In practice the party that asks you for proof is your acquirer or your provider.
For smaller merchants, proof usually takes the form of a self-assessment questionnaire, which the Council describes as a validation tool with several types, each with its own eligibility criteria. The less card data touches your systems, the fewer requirements fall on you: the Council notes that a listed point-to-point encryption solution can significantly reduce their number, without removing the standard from your environment altogether. A hosted payment page works on the same principle.
The same discipline applies in a lighter form elsewhere: a direct debit mandate holds bank details and belongs in a system with access control, and the recovery phrase of a wallet that receives onchain payments is stored offline and never typed into a message.
Which payment methods fit your business model?
The right methods are the ones that match how your customers buy: at a counter, at an online checkout, against an invoice, on a schedule, or in a few large transfers. Start from the business model, pick the method the customer expects, then add a second one that is cheaper or more final for the payments where that matters.
A retail counter needs cards and wallets, and cash where your customers still carry it. Card volume here is many small payments, so the fixed fee per payment deserves more attention than the percentage.
An online shop needs cards and wallets at checkout. Online sales tend to carry more dispute exposure than in-person sales, because the card is not present, so delivery proof and a clear refund policy are part of the payment setup.
A services business that invoices should put bank details and a payment link on every invoice and let the customer choose. A business customer paying $2,500 will often choose a transfer if it takes one click, and the fee difference at that size is large. What makes an invoice get paid sooner has its own guide.
A subscription or membership business needs a method it can pull on a schedule: direct debit, or a card kept on file by the provider. Direct debit costs less and does not expire the way a card does, but it carries the refund rights described above, so many subscription businesses offer both.
A business closing high-value deals needs a method with no practical ceiling and no open reversal window: a wire, or an onchain payment between parties equipped for it. Cards are rarely suitable at that size, for cost and because provider limits apply: on a single $250,000 payment, the illustrative card rate above would come to $7,250.30, against an illustrative fixed charge of $15 on an incoming wire. The companion guides on receiving large B2B payments, on B2B payment methods compared and on ACH versus wire versus onchain payment go into the detail.
High-value deals also raise a question the other models rarely do: one payment that has to be shared among several parties, such as a seller, a broker and a referrer. The usual route is to receive the full amount and pay the others out afterwards, which makes you responsible for those onward transfers and for their timing. A payment router is a different arrangement for that case. Shaka is one: each party's share is set as a percentage of the deal and can be signed by each recipient before the client pays, the client pays once through a payment link, and every party is paid their share at the same moment, in one onchain transaction that is final and that each party can see. It routes the payment and never holds the funds, a deal can have at most 20 recipients, and it is not an escrow service, a processor or an invoicing tool, so it does not fit a deal where money must be held until a condition is met, or everyday sales to one recipient.
What does each mix of payment methods cost in total?
On the same $50,000 of monthly sales, the total cost of accepting payments runs from about 1% to about 3.5% in the three worked examples below, and the gap comes from the mix of methods and the size of each payment, not from negotiation. Every rate here is illustrative, chosen to show how the structures behave; your own quotes replace them.
The illustrative rates are these. Cards through a payment facilitator: 2.9% plus $0.30 per payment, no monthly charge. Cards through a merchant account: 2.2% plus $0.10 per payment, plus $30 a month. Bank debit or bank payment through a link: 1% of the amount, capped at $5 per payment, and $4 for each failed collection. Cash: 0.3% of the amount deposited.
The retail shop takes 1,250 payments of $40, of which 1,100 are by card or wallet and 150 in cash. The services firm sends 20 invoices of $2,500; 14 are paid by bank payment through the link and 6 by card. The subscription business collects $50 from 1,000 subscribers, 700 by direct debit and 300 by card on file, and 14 of the debits fail.
| Business and mix | Fees for the month | Share of $50,000 | Same sales, all by facilitator card |
|---|---|---|---|
| Retail shop: merchant account cards plus cash | $1,126.00 | 2.25% | $1,624.00 (3.25%), cash kept |
| Services firm: 14 bank payments, 6 card payments | $506.80 | 1.01% | $1,456.00 (2.91%) |
| Subscriptions: 700 direct debits, 300 cards | $931.00 | 1.86% | $1,750.00 (3.50%) |
The retail figure is built from $968.00 of percentage fees on $44,000 of card sales, $110.00 of fixed fees on 1,100 payments, the $30 monthly charge and $18.00 on $6,000 of cash. On the facilitator rate the same card sales would cost $1,276.00 plus $330.00, a difference of $498 a month. The merchant account's monthly charge pays for itself from the 63rd card payment of $40 in a month, since each payment costs $0.48 less; below that volume, the flat rate with no monthly charge is the cheaper one.
The services firm shows the cap at work: 1% of $2,500 would be $25, the cap brings it to $5, so 14 bank payments cost $70.00, while the 6 card payments cost $436.80. Had all 20 customers paid by card, the month would have cost $1,456.00, which is $949.20 more.
The subscription business pays $350.00 for 700 debits at $0.50 each, $525.00 for 300 card payments and $56.00 for 14 failed collections. All 1,000 payments by card would cost $1,750.00, of which $300.00 is the fixed fee alone: on a $50 payment the fixed $0.30 adds 0.6 percentage points to the rate.
These totals leave out what a price list does not show: staff time banking cash, disputes and refunds, terminal hardware. They also leave out revenue: a method that costs more can still be the right one if customers buy more readily with it.
How do you reconcile and book the payments you receive?
Reconciling means matching every amount that reaches your bank account to the sales that produced it, and booking fees, refunds and disputes as separate lines instead of leaving them buried in a net figure. The work differs by method, because each method reports in a different way.
Bank transfers arrive one by one, gross, with a reference: matching is one line to one invoice. Card and wallet payments arrive as payouts, one bank line that covers many sales, often net of fees, refunds and disputed amounts; the provider's payout report explains the line and should be filed for every payout. Direct debits arrive as a batch per collection date, with failed collections coming back days later as separate debits. Cash is reconciled at the till against the day's recorded sales, then again when the deposit appears on the statement. Onchain payments are matched by transaction identifier and amount, with the value in your bookkeeping currency at the time of receipt recorded alongside.
Book the gross sale, then the fee as an expense. A $40 card sale that reaches you as $38.54 on the facilitator rate is $40.00 of revenue and $1.46 of payment cost, not $38.54 of revenue. Recording the net understates both your sales and your costs.
Three habits keep the work short. Give every invoice a unique number and ask for it as the payment reference. Use a clearing account in your books for each provider, so that sales go in, payouts come out, and whatever balance remains is exactly what the provider still owes you or has held back. And reconcile on a fixed rhythm, weekly at least: a missing payout found in the same week is a quick message, while one found at year end is an investigation. What settlement means at each stage, and the rails underneath every method, are each explained in their own guide.
