To accept a one-time credit card payment, open a free account with a mobile payment processor such as Square or Clover, verify your identity, and then either swipe the card on a small reader, key the details into the processor’s virtual terminal, or email the buyer an invoice with a payment link. You can be set up and taking the charge the same day, and the money reaches your bank account within one to three business days minus a per-transaction fee.
No storefront, no contract, no monthly subscription on the basic plans. You pay only when a card is run.
Three Ways to Run the Charge
Which method fits depends on whether the buyer is standing in front of you.
A mobile card reader is a small device that plugs into or pairs wirelessly with your phone. The buyer taps, inserts, or swipes; the reader encrypts the data and sends it to the processor. Entry-level readers from major providers run between $0 and $49, and some ship the first reader free with a new account. This method carries the lowest processing rate because the card is physically present.
A virtual terminal is a secure web page inside the processor’s dashboard. You type in the card number, expiration date, security code, billing ZIP, and dollar amount, then submit. No hardware. This is the fastest path for phone orders or any situation where you have the card details but not the card.
An online invoice with a payment link is a digital invoice you create in the processor’s software and email to the buyer. They click the link and enter their own card details into a secure portal. You never touch the card data, which simplifies your security obligations. For a single remote transaction, this is usually the cleanest option.
Opening the Account
Sign up on the processor’s website and link a personal or business checking account so the processor can deposit your funds. Federal anti-money-laundering rules require the processor to verify your identity before activating the account.1FFIEC. Assessing Compliance with BSA Regulatory Requirements – Customer Identification Program At minimum, have ready:
- Your legal name and date of birth
- A residential or business address
- A taxpayer ID: Social Security number or Employer Identification Number
- A government-issued photo ID such as a driver’s license or passport
Verification usually takes minutes.
What You Need From the Buyer
If you’re using a card reader, the device captures everything when the buyer taps or inserts. For a virtual terminal or a keyed-in phone order, you need the following off the card:
- The 15- or 16-digit card number
- The expiration date
- The cardholder name as printed
- The security code (three digits on the back for Visa, Mastercard, and Discover; four on the front for American Express)
- The billing ZIP code, which the processor checks against the issuing bank’s records to flag possible fraud
Do not write these details down or keep a photo of the card after the charge runs. The Payment Card Industry Data Security Standard governs how card data must be handled, and reputable processors build compliance into the platform so you don’t have to manage encryption yourself. Storing anything on a sticky note or in your camera roll strips that protection away and puts the liability on you.
Running the Payment
For an in-person charge, open the processor’s app, enter the dollar amount, and have the buyer tap or insert the card. The reader encrypts the data and sends an authorization request to the buyer’s bank. Within seconds the screen shows approved or declined. If approved, the buyer can receive a digital receipt by email or text.
For a keyed transaction, log into the virtual terminal, type in the card details and the amount, and submit. For an invoice, enter the buyer’s email address in the dashboard and send the payment link; the buyer completes the entry themselves. Watch for error messages about a mismatched billing ZIP or an invalid security code, because those usually mean a digit was entered wrong rather than the card being bad.
Fees and When the Money Arrives
Funds settle from the buyer’s bank to your linked account within one to three business days, and processing fees come out before the deposit lands. Square’s published rates are typical of the industry: 2.6% plus $0.15 per transaction for in-person card reads, 3.5% plus $0.15 for manually keyed payments, and 3.3% plus $0.30 for online payments.2Square. Square Processing Fees, Plans, and Software Pricing Keyed and online rates run higher because the processor absorbs more fraud risk when the physical card isn’t there.
You can add a surcharge that passes the fee to the buyer, but the rules are specific: several states including Connecticut, Maine, and Massachusetts ban credit card surcharges outright, Visa caps them at 3% and Mastercard at 4%, and Mastercard requires at least 30 days’ written notice to the network and your processor before you start.3Mastercard. Merchant Surcharge FAQ For a single sale, most people find it simpler to build the fee into the price.
Fixing a Mistake: Void or Refund
If you charged the wrong amount or the deal falls through, timing decides which tool you use.
A void cancels the transaction before it settles, which happens when the processor batches the day’s charges at the end of the business day. The money never actually moves, so voiding costs nothing in processing fees. Most processors let you void from the same screen where you ran the charge, as long as the batch hasn’t closed.
Once the batch settles, void is off the table and you have to issue a refund. A refund sends the money back to the buyer’s card, but you’ve already paid the processing fee on the original charge and generally won’t get it back. If you catch a mistake within a few hours, void immediately.
Chargebacks and Keeping a Paper Trail
A chargeback happens when the buyer contacts their card issuer and disputes the charge. The issuer reverses the payment and pulls the money from your account while it investigates. Buyers generally have 120 days from the transaction date to file, though the window varies by network and reason code.
Chargebacks also carry a fee on top of the reversed payment, usually between $20 and $100 per dispute depending on your processor. You’ll find the specific figure in your processing agreement. If the chargeback isn’t justified, you can contest it by submitting evidence to your processor within the response window the card network sets.
One-time sellers lose chargebacks most often because they kept no paper trail. Before you run the charge, get something in writing that describes what the buyer is paying for: an email thread, a simple invoice, or a signed receipt. Save proof that the billing address and security code matched, any messages confirming the buyer received the item or service, and, for an online transaction, the IP address. That is the file you’ll draw from if the payment is later disputed.
Reporting the Income on Your Taxes
Money you receive through a card processor is reportable income, and the IRS sees it. Your processor will issue a Form 1099-K reporting the total paid to you during the calendar year, with no minimum dollar threshold on card transactions.4Internal Revenue Service. Form 1099-K FAQs – Common Situations The $20,000-and-200-transaction threshold that gets discussed in the news applies only to third-party settlement networks such as peer-to-peer apps, not to card readers or virtual terminals.5Internal Revenue Service. IRS Issues FAQs on Form 1099-K Threshold Under the One, Big, Beautiful Bill
Where it goes on your return depends on what you sold. Services or resale inventory are business income on Schedule C. A personal item sold for more than you paid produces a gain reported on Form 8949 and Schedule D. A loss on a personal item is not deductible, but if a 1099-K was issued you still account for it on Schedule 1.4Internal Revenue Service. Form 1099-K FAQs – Common Situations
Hold your receipts, invoices, and any communication about the sale for at least three years from the date you file the return that reports the income.6Internal Revenue Service. How Long Should I Keep Records Credit card receipts and deposit records are specifically the kind of documents the IRS expects you to have organized by year.7Internal Revenue Service.