Are you finding it difficult to manage monthly or one-time payments?
Are you tired of chasing your customers for payments?
Then, you might be interested in finding a more convenient approach to accepting payments faster.
According to marketresearch.com, the digital payment market is expected to reach US$12.55 trillion in the next four years to deliver a better customer experience.
One of the best ways to increase sales is to digitize business processes. Learn how to accept payments online to help your business reach a wider audience and provide a smooth user experience.
In this blog, you will learn:
- Ways to accept online payments
- How does payment processing work?
- Different options to accept payments online
- Benefits of implementing a payment gateway
Let us start with the ways to accept online payments.
How to Accept Payments Online – 5 Simple Ways
eCommerce platforms like Shopify’s own payment gateway offer hundreds of card payment options. We have done the research for you on different methods of eCommerce payments to implement at the checkout page of the form.
- Accept Payment from Credit and Debit Cards
- Create a Payment Gateway for Easy Payment Options
- Accept Mobile Payments
- eChecks Through ACH
- Setup Recurring Billing Process for On-time Monthly Fee
- How Does Payment Processing Work?
- 7 Benefits of Secure Payment Processing for Business
- Payment Pricing Structure for An Online Store
- Top Payment Processing Software to Accept Online Payments
- Frequently Asked Questions
1. Accept Payment from Credit and Debit Cards
Though mobile payment apps are more prevalent, using a credit and debit card is still one of the popular payment methods. You can easily facilitate any card payment through online payment processors as they accept major credit cards worldwide.
2. Create a Payment Gateway for Easy Payment Options
There are multiple ways to approach secured online payment gateways. Create a customized payment form with third-party software that automates the process to upscale your business. The more payment methods you integrate into the form, you can reach more audience as this helps them to send money.
3. Accept Mobile Payments
If you are mapping out how to accept online payments, you need to start mobile app payments, popularly known as digital wallet payments. This stores your payment information enabling quick payments at the checkout page.
4. eChecks Through ACH
Much like the manual paper check process, eChecks will deposit money to the merchant’s bank account via ACH (Automated Clearing House) software. This is a quicker and more reliable way for users to send payments. All you need to do is give the customer your direct deposit information which includes:
- Bank’s routing number
- Bank account number
You could also receive ACH vis Stripe with your own account with a minimal transaction fee.
5. Setup Recurring Billing Process for On-time Monthly Fee
As you have read above Stripe allows you to send recurring bills to the users, and it also allows multiple other features that you may want to invest into. Stripe sends bills to the users automatically. The recurring billing software is ideal for subscription-based businesses because it allows your customers to directly pay as soon as the payment is due.
Now that you have an idea of different ways to accept payments, understand the working of processing payments online.
How Does Payment Processing Work?
You might have noticed while you are shopping for groceries that once you pay with your card, the payment processor works at the backend to complete the transaction. It authenticates and sends the money to the business account from your account.
Similarly, when you integrate a payment processor to accept online payments, here’s what happens in the background of your account once your customer pays through any payment gateway.
Step 1: A customer provides card details or an e-check detail to pay the amount online. This is done through an online payment page.
Step 2: Whether it is credit and debit card payments, google pay, apple pay, or any other payment method, it goes through a payment processing provider. This encrypts the user’s personal information related to the customer’s bank they use for payment.
Step 3: Electronic payments ensure the security of the data and send it to the preferred payment method in just a few clicks.
Step 4: The payment processor then sends the information to the payment issued bank to process transactions if they have enough credit to make any purchase.
Step 5: The payment processors send accept or denied notifications to the merchant account to proceed further with accepting payments with the customer or send a failure notification.
Step 6: Once the payment is completed from the user’s end, the amount goes to the business bank account integrated with the online payment processors.
The above steps may sound lengthy but it all happens in a matter of seconds and requires no effort from you or your customer’s end.
Let us now dive to understand what are the benefits of using online payment processing software to accept recurring billing or one-time payments.
7 Benefits of Secure Payment Processing for Business
Despite of constantly shifting landscape of digital payments, the advantages of online payment processors are numerous. However, with the help of secure payment methods, you can avail of multiple benefits like below.
Acquire More Customers to Boost Sales
One of the biggest benefits to accept online payments is to increase the customer base and reach a wider audience globally. Digital payments remove geographical boundaries and open their shop to the whole world. So, it is important to implement the best payment service providers to accept payments online and increase sales.
Convenience to Customers for Hassle-free Payments
Convenience is one of the major factors that influence a user. Keep the steps simple and easy for payment processing. A user might abandon the thought of purchasing if they find more steps and a complex payment process.
From mobile payments to credit card payments, convenient forms of funding such as PayPal, and Stripe is as easy as logging into an account to complete payment. Another benefit to providing convenience to your users is the online store that helps the users to shop 24/7.
Optimize Cashflow to Have Higher Predictability of Payments
Another important benefit of accepting payments online to merchants is to optimize the cash flow. Implementing digitization means you will be able to charge automatically the users for subscriptions, send timely reminders, and offer flexible payment alternatives for payment declined.
Sending automatic reminders and saving time, will result in quick payments and the ability to collect revenue faster.
Reduce Operational Costs by Accepting Payments Online
When it comes to the benefits of online payments, it is important to mention that this payment gateway set reduces operational costs in many ways. In comparison to a traditional payment setup where a user visits the store to pay, implementing online automated payments will reduce costs for your business.
Multiple Payment Options to Accept Payments Online
Implement a flexible payment processor, something that is challenging for users if they pay offline. Having preferred options available in the payment form will increase the number of users.
Payment wallets and payment methods like PayPal, Stripe, Square, Venmo, etc. will help customers choose their preferred options in case the completion of the payment fails.
Analyze Customer Behavior to Make Data-driven Decisions
To increase revenue, it is important to analyze customer behavior and make decisions based on it. You can understand customer behavior better based on the following points:
- The products they view on your website.
- The device they are using to purchase.
- Their preferred payment methods.
- How much time do they spend on the website?
You should also check the demographic data such as age, gender, and location to help determine the user’s need. Collecting these data will surely help you boost sales, and receive informative data.
Easy and Quick Setup for Small Businesses to Save Time
From all the benefits mentioned above, implementing a payment gateway is the easiest and quick to set up. This benefits small businesses that think it is a long process than selecting one among the payments gateways. You can implement PayPal, quickly with the pay form you create and start accepting transaction fees and subscription fees instantly.
Now that you are aware of the above benefits, let us explore the payment pricing structure in our next section.
Payment Pricing Structure for An Online Store
The payment system structure typically falls under 5 categories.
Payment Gateway Fees
This is a fee charged by payment processing providers like PayPal and Stripe for processing transactions through their platforms. This fee can be a percentage of the transaction amount or a flat rate.
Merchant Account Fees
A merchant account is a special type of bank account that allows you to accept credit card transactions. Merchant account providers may charge setup fees, recurring billing fees, or other types of fees.
PCI Compliance Fees
Payment Card Industry Data Security Standards (PCI DSS) are a set of security standards that all merchants who accept credit cards and debit cards must comply with. Compliance with these standards may require additional costs such as software, personnel, and certification costs.
Refund or Chargeback Fees
Some of the payment gateways may charge a fee for processing the amount refund. Everyone understands what is a refund, it is when a customer wants to return a product and raise a request for a refund. Whereas chargeback fees occur when a customer disputes to get the refund through their credit card issuer.
Chargeback is initiated by the customer’s bank. If the merchant is responsible to prove the transaction. If the merchant fails to prove the transaction was valid, the customer will get the chargeback and the merchant will have to lose the revenue.
Currency Conversion Fees
Being a merchant, if you plan to accept payments online from different currencies, there may be additional fees associated with the conversion rates to that of your local currency.
For example, if a merchant’s online store is based in the USA and accepts both US dollars and EURO, they will need to convert the funds into the merchant’s local currency. While accepting payments, it is important to consider the potential impact of conversion fees and budget.
Now that we have explained the payment processing fees that incur while accepting payments, let us now gives you some of the best payment processing software to integrate to offer seamless payment services to your customers.
Top Payment Processing Software to Accept Online Payments
Once you have decided to create a payment form to accept payments from your customers, you will need to decide which payment processing software or payment gateway to use. Here are the best options for you.
|Payment Service Provider||Features|
|Widely accepted and recognized globally, includes a variety of features such as invoicing and recurring payments.|
|Easy integration with a wide range of e-commerce platforms and customizable checkout options.|
|Offers a variety of point-of-sale (POS) hardware options, including mobile card readers and tablet-based registers.|
|Popular for peer-to-peer payments, allows users to easily transfer money to friends and family.|
|Seamless integration with Android devices and Apple devices allows users to easily make payments using their Google account and Apple account.|
Bonus: If you want to know more about the above payment gateway features and their transaction fees, we have provided them in our blog based on popular online payment services.
Frequently Asked Questions
How are online payments processed?
Online payments are processed through multiple gateways that communicate through financial institutions and connect through bank accounts with the merchant’s bank account to ensure funds. You can also accept free online payment via ACH transfers.
What is the safest way to accept payments?
Accepting online payments is the safest option after cash. You will have more flexibility. Choose the best possible payment provider to receive secured payments. Look for providers that use two-factor authentication or encryption in terms of securing payments and information.
What types of online payment methods can I accept?
Credit and direct debit, e-wallets, bank transfers, and digital payments are some of the most common types of online payment methods that you can accept.
Are there any fees associated with accepting online payments?
Yes, there is a certain percentage of fees associated with accepting online payments, such as transaction fees, chargeback fees, and monthly or annual fees. These fees can vary depending on the payment processor and the type of payment method being used.
How do I protect my customers’ payment information?
Payment processors typically provide security measures such as encryption and fraud detection to protect your customers’ payment information. Additionally, you should ensure that your website or payment gateway is secure and that you are compliant with industry standards such as PCI DSS.
Start Accepting Online Payments Now
This was all about how to accept online payments and how would it benefit your business. In order to set up payments, you will need to choose a payment processor or a payment service provider. The most important part of this is to allow your customers to pay seamlessly and on time.
Be ready to expand multiple options to accept payments online. Create an online payment form by implementing one of the best suitable payment services to receive monthly fees from your customers.