As a contractor, it may be wise to accept as many forms of payment as possible. While cash and checks may be preferable, since there are no fees associated with those methods of payment, allowing a customer to use a credit card could mean more business for you. You have a couple of options for accepting credit cards, including setting up a merchant account, using PayPal or Google Checkout. The fees will vary for each, so you will need to decide what works best for your business. Before you can begin using any of these services, you must create an account for each.

Visit to set up an account if you do not already have one. Having a PayPal account means that you can accept credit cards that offers seller and buyer protection. If you already have an account with PayPal, you can send invoices via email to your customer's email address. They do not have to have an account to pay.

Select the "Business" tab on the PayPal website. Then click on "Recommendation Wizard." Answer the question by selecting the preferred payment method. Then enter whether your salary is more or less than $100,000. Depending on your answer, PayPal will direct you to open a Virtual Terminal (if you want to accept credit cards by mail, phone or fax) or a standard or business account (if you want to accept payments by email). A virtual terminal will cost you $30 per month plus a percentage (up to 3.1% + $0.30) of each transaction. With a standard account, you will pay up to 2.9% + $0.30 on each transaction. PayPal offers additional services if you have a website.

Select "Request Money" on Paypal's website to create an invoice to send to your customer via email. For the Virtual Terminal, follow the instructions for creating an invoice. Your customer then enters their credit card information (if they do not already have a PayPal account) and submits payment. Payment is sent to your account within minutes.

Visit to set up a Google Checkout account. Google charges up to 2.9% + $0.30 per transaction. Once you have set up your account, click "Tools" then select "Email invoices." Fill out the invoice and email it to your customer. Once your customer pays with their credit card, the money is in your account within minutes.

Visit to set up an account that allows you to physically accept credit cards via a swipe machine. Sign up for their 30-day trial or purchase a basic point-of-sale (POS) system that allows you to accept credit cards by swiping the customer's card. POS systems start at $99, plus a monthly fee for using their services.


If you open a merchant account, be sure you understand your responsibilities as a merchant.