How to Accept Payments Online for Your Business

Imagine this: a potential customer stumbles upon your handcrafted jewellery store online and admires a stunning necklace, but then… crickets. There is no easy way to pay. These days, a seamless online checkout experience is no longer a luxury; it’s a necessity. So, how can you transition your digital presence from a mere storefront to a thriving hub of commerce? This comprehensive guide will reveal the key strategies for seamlessly integrating online payment methods, empowering you to elevate your business and drive growth.

Components of online payment processing

To start accepting online payments, you’ll need a trusted team of financial partners working behind the scenes. Here are the key players involved:

Payment gateway

The payment gateway is a secure bridge between your website or app and the payment processor. It encrypts and transfers your customer’s payment details for validation before the transaction proceeds.

Payment processor

Once the payment gateway encrypts the payment details, they’re sent to the payment processor. The payment processor verifies the transaction’s details, ensuring its accuracy and legitimacy. It collaborates with the payment gateway and your customer’s bank to validate the transaction before approval.

Acquiring bank

Once the transaction is approved, the acquiring bank oversees the movement of funds from the transaction to your business account. It manages transaction finances and ensures smooth fund transfers.

Merchant account

Throughout this process, your merchant account is a dedicated bank account where funds from online transactions are securely held before being transferred to your primary business account. It’s managed by the payment processor or acquiring bank.

Security measures

Online payment systems implement security measures like encryption and authentication to protect businesses and customers from fraud and unauthorised access. These measures ensure the safety of transactions.

How online payment processing works 

Think of online payment processing as a high-tech security team working behind the scenes to ensure smooth and safe transactions. Here’s a closer look at the magic behind online payments:

1. Customer checkout

Imagine your customer, enchanted by your product, arrives at the checkout stage. They input their credit card details on your website’s secure payment page, eagerly anticipating their purchase.

2. Payment gateway

At this moment, their sensitive payment information is encrypted within a secure portal, much like a digital vault. This encryption shields their data from prying eyes during transmission to the payment processor, embodying the digital equivalent of Fort Knox for financial information. This secure encryption safeguards your customer’s data and fosters trust in your business.

3. Payment processor

The encrypted payment details reach the payment processor, a financial institution entrusted with verifying the transaction’s integrity. Acting as a meticulous verifier, the payment processor liaises with the customer’s bank to authenticate the card’s validity and ensure sufficient funds are available. This crucial step helps mitigate the risk of fraudulent transactions, providing you and your customer peace of mind.

4. Funds transfer

Assuming all verification processes pass muster (pun intended), the funds are seamlessly transferred from your customer’s account to your merchant account. This transfer, akin to a secure money vault in action, facilitates the movement of funds from one digital location to another. However, it’s essential to note that this transfer takes time. Depending on various factors, such as banking procedures and settlement times, the funds typically take a few business days to reach your account.

5. Confirmation: a green light for everyone

After the transaction is successfully approved, you and your customer receive confirmation of the sale. This confirmation is a testament to a smooth and successful transaction that satisfied both parties. 

Types of online payment methods

The key to online sales success? Offering a variety of payment options to cater to your customers’ spending habits. Here are some popular methods to consider ensuring you don’t miss out on a single sale:

• Credit and debit cards

The tried-and-true classics are perfect for customers who value convenience and security. Visa, Mastercard, American Express – all the familiar faces should be on your payment menu.

• Digital wallets

Speedy checkout champions whiz through checkout with options like Apple Pay, Google Pay, and PayPal. These digital wallets allow customers to store their payment information securely, enabling lightning-fast purchases with a tap or click.

• ACH Payments (eChecks)

ACH payments offer a secure and familiar option for customers who prefer direct transfers from their checking accounts.  

Bonus for businesses: Unlike credit cards, ACH payments often guarantee funds, reducing the risk of chargebacks.  However,  be mindful of slightly longer processing times compared to instant methods.

• Buy Now, Pay Later Services

Attract budget-conscious customers, especially younger demographics, with the flexibility of BNPL services like Klarna or Afterpay. Highlight the option to split purchases into manageable instalments, making even high-ticket items like furniture more accessible. Be transparent about interest-free periods versus fee-based plans, allowing customers to make informed decisions.

Benefits of accepting online payments: a win-win for your business and your customers

Forget the limitations of cash and checks. Online payments offer a powerful boost to your business, no matter what you sell. Here’s a breakdown of the key benefits:

Global reach, wider audience

Expand your customer base beyond your local area. Online payments allow you to sell to anyone with an internet connection, anywhere in the world. This translates to increased brand awareness and a wider customer pool for your products and services.

Boost sales with frictionless checkout

Imagine a checkout process so smooth it feels invisible. Online payments eliminate the hassle of manual transactions, encouraging impulse purchases and increasing your conversion rates (turning website visitors into paying customers).

Efficiency gains, more time for you

Ditch the paperwork and manual processing. Online payment systems automate the entire transaction process, freeing up your valuable time to focus on what matters most – running your business and offering incredible products.

Enhanced security, peace of mind

Reputable payment processors employ robust fraud protection measures. They act as your online security guards, constantly monitoring suspicious activity and safeguarding you and your customers from financial threats.

Data-driven decisions, smarter strategies

Many payment processors offer valuable data and analytics tools. This data provides insights into customer spending habits and purchasing trends. With this knowledge, you can tailor your product offerings and marketing strategies for maximum impact, ensuring your business stays ahead of the curve.

How to accept online payments: A step-by-step guide

Ready to streamline your business and reach new customers worldwide? Here’s a clear roadmap to get you started with accepting online payments:

1. Choosing the right payment processor:

Think of your payment processor as your trusted partner in handling online transactions. Here’s how to find the perfect fit:

• Do your research: 

Compare different processors based on several key factors.

• Transaction fees: Find a balance between competitive rates and the features offered. Consider any monthly fees or hidden costs.
• Ease of use: A user-friendly interface is crucial for you and your customers.
• Security features: Robust security measures are essential to protect your business and customer data. Look for PCI compliance.
• Supported payment methods: Offer your target audience’s preferred methods (credit cards, digital wallets, etc.).
• High-volume businesses: Look for processors that handle large transactions efficiently.
• Startups: Many processors offer special plans with lower fees.
• Global reach: If you plan to operate internationally, choose a processor that supports international payments and currencies.

2. Setting up your merchant account:

Think of your merchant account as your online bank account, holding the funds received from your online transactions. Here’s what you need to know:

• Obtaining your account: there are two main options:
  • Payment processor: Many processors offer merchant accounts as part of their service package.
  • Your bank: Some banks also offer merchant account services.
• Application process: You must be prepared to provide essential business information and financial statements and potentially undergo a credit check.

3. Integrating the payment gateway:

The payment gateway is the secure bridge between your website (or any online platform) and the processor. Here’s how to get it set up:

• Working with your developer: Seamless payment gateway integration is crucial for a smooth customer experience.

If you don’t have an in-house developer, many processors offer pre-built plugins or integrations for popular platforms.

Before going live, thoroughly test your online payment system with various payment methods and scenarios. This ensures a smooth launch and minimises any potential hiccups for your customers.

How to choose an online payment provider

It can be costly and time-consuming to set up several providers to be able to accept payments online. For businesses who want to avoid a slower launch to market, payment service providers help businesses accept payments online quickly. This enables you to launch to market with the right payment methods and a customisable interface adapted to your brand. A single provider removes the need for multiple third parties, bringing numerous payment methods to one platform so your businesses can adapt to local markets. Moreover, payment service providers leverage technologies to reduce fraud, enhance customer experience with data-led decisions, settle payments faster and optimise security.

Choosing the right online payment provider is crucial for the success of your online store. Here are some key factors to consider:

1. Unveiling the fee structure

Transaction fees can significantly impact your bottom line.  Compare different pricing models offered by providers:

• Per-transaction fees: These fees are typically a small percentage of each sale. Look for providers with competitive rates that align with your sales volume.
• Monthly fees: Some providers charge a flat monthly fee, regardless of transaction volume. This can be ideal for businesses with consistent sales.
• Hidden costs: Beware of additional charges like setup fees, chargeback fees, or international transaction fees.

2. User-friendly interface:

A smooth and intuitive payment experience is paramount for customer satisfaction.  Consider:

• Your needs: Choose a platform that is easy for you to manage and offers clear dashboards and reporting tools.
• Customer experience: Prioritise a user-friendly checkout process that is quick, clear, and mobile-optimised for seamless navigation on any device.

3. The fortress of security

Security breaches can be devastating.  Ensure your chosen provider prioritises robust security features:

• Data encryption: Look for providers utilising industry-standard encryption protocols to safeguard sensitive customer information.
• Security compliance: Choose processors adhering to PCI compliance (Payment Card Industry Data Security Standard) for guaranteed adherence to best practices.
• Fraud protection measures: Advanced fraud detection tools like address verification and CVV checks help to minimise fraudulent activity.

4. Catering to customer preferences

Offering a variety of payment methods allows you to cater to a broader audience and increase conversion rates. Here are again some popular options:

• Credit and debit cards: These are the classic and trusted payment methods for many customers.
• Digital wallets: Offer Apple Pay, Google Pay, or regional options for a fast and convenient checkout experience.
• ACH payments (eChecks): A secure alternative for customers who prefer direct transfers from their checking accounts.
• Buy Now, Pay Later (BNPL) Services: Attract budget-conscious customers by offering instalment payment options.
• Alternative payment methods (APMs): Boost customer acquisition by offering alternative payment methods preferred by consumers in the local markets in which your business operates. Whether cards, e-wallets, digital payment methods, or prepaid cards, APMs allow greater convenience and accessibility globally by catering to the needs of local regions. 

5. Reliable customer support

Even the best systems encounter occasional hiccups.  Choose a provider that offers reliable customer support:

• Multiple channels: Look for providers with multiple support options, such as phone, email, and live chat, for convenient assistance.
• Response times: Prioritize providers known for prompt and efficient customer service to minimise downtime and frustration.

By carefully considering these factors, you’ll be well on your way to selecting the ideal online payment provider for your business. Remember, a secure, user-friendly, and versatile payment system is the cornerstone of a thriving online presence. So, choose wisely and watch your business flourish.

Bonus tip: Consider future scalability. Choose a provider that can accommodate your business growth and allow you to easily add new features or integrations as your needs evolve.

Wrapping up

Accepting online payments is no longer optional for businesses of all sizes. By offering various secure and convenient payment options, you can unlock new sales opportunities, reach a global audience, and boost your bottom line. With the knowledge and resources provided in this guide, you’re well-equipped to navigate the world of online payment processing and transform your website into a powerful sales machine. So, take the leap, embrace online payments, and watch your business soar.

Unlimit allows businesses to create tailored and flexible payment plans for their customers easily and in just a few clicks. This includes creating subscription packages to cater to diverse player preferences and market segments, instalment payments, and payment by link for a much better customer experience. With direction integration to local APMs, businesses can leverage our single unified platform to expand seamlessly across borders, benefitting from our localised support infrastructures to generate capital in emerging markets. Go borderless with Unlimit and get in touch with our experts here.