How to Accept Online Payments: Easy Guide for Your Business!

In this ever-growing world of startups, the flow of transactions needs to be faster and smoother. Online payments are one of the easiest ways through which businesses can make payments at anytime and anywhere with minimum transactional fees. Let’s dive deeper into the entire process of online payments from start to finish. 

In the following section, we will discuss the advantages of taking online payments, the various payment methods offered, selecting an online payment service provider, and establishing online payment processing. Whether you are a small business owner or a decision-maker at a bigger company, this guide will offer the necessary information for accepting online payments rapidly, securely, and effectively, and for expanding these procedures as your business expands.

Types of Online Payment Methods: –

Businesses can choose from a wide variety of online payment methods, each with its own benefits and drawbacks. It’s important to consider your target audience’s preferences, the functionality of your primary sales channels and the cost and security implications of each method. You’ll probably decide to offer more than one or two payment methods since online customers prefer to have a variety of options.

Credit and debit cards:

Credit and debit card payments go out for approximately 34% of global online transactions in 2021. They offer convenience, speed, and security, therefore, they are accepted by most online businesses. 

eCheck Payments:

eCheck is an electronic version of paper checks, enabling businesses to transfer funds directly from a customer’s bank account. This payment method is increasingly popular, with around 30% of U.S. businesses offering it. eChecks typically have transaction fees that are 50-60% lower than credit card payments, making them cost-effective for high-volume transactions. They are also ideal for recurring payments, such as subscriptions, and now clear within 3-5 business days, thanks to technological advancements.

Digital wallets:

Digital wallets, AKA, e-wallets, are online accounts that manage payment information. Well-known digital wallets consist of PayPal, Apple Pay, and Google Wallet. In 2021, digital wallets surpassed credit and debit cards to become the most preferred e-commerce payment method worldwide, making up almost 50% of all transactions.

Bank transfers:

Bank transfers directly shift money from a customer’s bank account to a business’s bank account. This approach may be more time-consuming and less user-friendly compared to alternative payment methods, but it is commonly favoured by individuals without access to a credit or debit card, or those looking to steer clear of credit card charges. 

Cryptocurrencies:

Although cryptocurrencies are a recent development, companies accepting cryptocurrency payments may gain a competitive advantage and appeal to customers who favour this form of payment. A Statista report predicts that worldwide cryptocurrency customer payments will hit $1.4 trillion by the year 2024. While cryptocurrency payments are rising, the estimated $590 billion in 2020 has significantly increased. However, it still only makes up a small portion of the entire online payments market due to limited customer adoption.

Mobile payments:

Clients have the option to make payments for products and services through their mobile devices, typically via a mobile application or digital wallet. As more individuals turn to smartphones for online shopping, the popularity of mobile payments continues to grow due to their speed and convenience.

Components of Online Payment Solutions: –

Online payment processing contains many components that work together to securely process and authenticate transactions. Such components include: 

Payment gateway:

A secure online portal connecting a business’s website or mobile app to the payment processor is known as a payment gateway. It records and secures the customer’s payment details before sending them to the payment processor for approval.

Payment processor:

The payment processor checks a customer’s payment details and approves the transaction. It communicates with the payment gateway and the customer’s bank or card issuer in order to validate and authorize the transaction.

Merchant account:

A merchant account is a designated bank account needed by businesses to receive and manage credit and debit card transactions. Merchant accounts are specifically utilized for the purpose of storing transaction funds. Afterwards, the funds are transferred to the main bank account of the business for the business to utilize as needed. Merchant accounts are typically established by the payment processor or acquiring bank.

Acquiring bank:

The bank that sends the transaction funds to the business’s account and typically offers the merchant account is known as the acquiring bank. It handles the financial components of the transaction, such as fees and chargebacks.

Security measures:

Various security measures are integrated into online payment processing systems to safeguard businesses and customers from fraud and unauthorized transactions. These measures could involve SSL encryption, tokenization, and two-factor authentication, among various others.

Benefits of Accepting Online Payment: –

There are several advantages of accepting online payments, including: 

Enhanced ease of use for clients:

Businesses can provide a more convenient payment option by accepting online payments, which allows customers to pay for goods and services from any location, at any hour, without needing to physically go to a store or mail a check. This adaptable payment feature decreases obstacles in the customer journey, leading to higher revenue, better customer satisfaction, increased loyalty, and improved customer lifetime value for businesses.

Rising sales and revenue:

Taking online payments can assist businesses in widening their customer reach, entering new markets, and boosting sales through eliminating obstacles to buying. Having a variety of payment options leads to increased chances of customers finishing their transactions, which in turn boosts conversion rates and revenue for the company.

Decreased risk of fraudulent activities and chargeback:

Online payment processing systems are equipped with security features that lower the chances of fraud and chargebacks. Through the utilization of a secure payment gateway and payment processor, companies are able to safeguard themselves and their customers from unauthorized transactions and fraudulent behaviour. For instance, Stripe Radar utilizes machine learning trained with data from numerous worldwide businesses to identify and prevent fraud in both offline and online transactions.

Efficient accounting and reporting procedures:

Online payment processing offers businesses a way to save time by simplifying accounting and reporting, as well as automating transaction records and reports. Companies like eCheckplan, which offer online payment processing services, do more than just decrease the operational tasks of businesses. They also compile, analyze, and present payment and customer data in a user-friendly format.

Steps for Online Payment Transactions: –

Online payments can be exhausting, especially if you are new to the digital world but once you know and understand each step then it can be quite easy. The steps include: 

1. Choose the right payment processor:

There are many portals available that offer services for online payments but it needs profound research and experience to search for efficient payment processors. Select the payment processor that suits your business in terms of privacy and cost. 

2. Set up a merchant account:

If any business’s payment processing provider provides the functionality of a merchant account, as eCheckplan does, then it means that that business does not need to open its merchant account to start accepting online payments. 

In other cases, businesses need to start their merchant account with their payment processors or acquire a bank. Such an account will allow the business to receive funds from transactions and manage its finances. The application usually involves offering business and banking information, as well as undergoing a credit check. 

3. Integrate a payment gateway: –

Once the merchant account is set up, businesses will then need to incorporate the payment gateway into their website or mobile app for that case. It usually involves adding code snippets/plugins, connecting the payment gateway to the business’s platform. Many payment processors provide flexible integrations for a huge range of use cases. 

4. Test and Launch: –

Prior to implementing online payments, companies must extensively test their payment-processing system to verify proper functionality. This involves conducting test transactions, reviewing for mistakes, and confirming that funds are deposited into the accurate bank account. Businesses can begin accepting transactions and launch online payments once everything is functioning correctly.

How to Choose the Right Online Payment Provider: –

There are a few things that can help in selecting the right online payment provider:

1. Value:

Usually, payment provides a percentage of each transaction and also a flat fee per transaction. Businesses must compare fees across different providers to focus on which offers the most value which is not necessarily the provider with the lowest fees. Focusing on which features are most valuable to the businesses and what features every provider provides. 

2. Security and Monitoring:

Businesses involve delicate information, including clients therefore, having a secure platform is a concern. Businesses need to search for payment providers that provide robust security functions like encryption, transaction monitoring, fraud prevention, and chargeback protection. Providers must also constantly improve their methods for detecting and preventing fraud, as well as identifying and reporting suspicious transactions or customer behaviour, which is always evolving.

3. Customer support:

Payment processing problems are a common occurrence for businesses, making it crucial to have reliable and supportive customer service. Businesses need to seek out payment providers that provide 24/7 support and offer various communication options.

4. Methods of payment:

Payment providers can provide a range of payment options, such as eChecks, credit cards, debit cards, digital wallets, and bank transfers. Businesses need to take into account the preferred payment methods of their target demographic when selecting a payment provider.

Conclusion : –

Reliable payment methods are essential for flawless businesses but it is also crucial to do your research and find the suitable provider that is trustworthy and does not add any hidden charges on your transactions. Remember, a successful business can only be run in a longer run if its operations are seamless.