Companies that process payments between businesses and banks (credit cards, digital wallets, ACH) are known as payment processors. Payment processors are essentially the intermediaries that enable merchants to accept payments from financial institutions as well as credit card companies.
When and How are Payments Processed?
In the background, the payment processor moves money from your account to the business’ account when you use your credit card at a retailer.
Payments made by card go through the following steps:
- Customers pay with credit or debit cards at merchants. In-person payments or online payments can be made using a payment terminal.
- To ensure privacy, the card information is encrypted and sent to the payment processor through a payment gateway or portal.
- To confirm a customer’s credit or cash availability, the payment processor contacts the customer’s issuing bank.
- Purchases are either approved or denied by the card issuer.
- During the transaction, the payment processor will send the retailer this “approved” or “denied” information back.
- As soon as the transaction is completed, the processor sends the funds to the retailer’s bank through the customer’s bank.
You and the customer don’t have to do anything – everything happens in seconds without any work from either of you.
The Top Online Payment Processors
After you decide which payment processing provider to use, you’ll need to develop a strategy for accepting payments online. In no particular order, here are seven popular choices:
1. PayPal
The price per transaction is 3.49% plus $0.49.
In the payment processing industry, PayPal is widely known and trusted. Their tools make it easy to enable secure payments for your visitors and integrate PayPal payments into your website. For international companies, the platform provides comprehensive coverage as well.
2. Venmo For Business
The payment will cost you 1.9% plus $0.10.
Payment software and app Venmo For Business is owned by PayPal. Your mobile app or website can be used to accept payments.
It is possible to set up a Venmo business profile to make it easier for users to find you on the application. In addition, Venmo will appear on your website right beside PayPal in the payment options section.
At checkout, a customer can choose Venmo, which directs them to the Venmo app. On your eCommerce site, Venmo payments can be added to the page where PayPal is also available, such as the product page, shipping cart, and checkout.
3. Stripe
The price per transaction is 2.9% plus $0.30.
With Stripe, online businesses can customize checkout pages, manage subscriptions, and make recurring payments. There are many payment options offered by Stripe, such as mobile apps, wallets, and credit cards.
4. Helcim
The price is 2.38% plus $0.25.
Ecommerce businesses can use Helcim to accept online payments either from scratch or as an additional payment option to their existing sites.
Through Helcim’s API, you can integrate secured online payments into your website, application, shopping cart, and/or billing system. Helcim also supports in-app and website payments, as well as phone and pay-through invoices, along with integration with your accounting software to save you time.
5. Apple Pay
Merchants are only charged transaction fees for credit/ debit card sales with Apple Pay – there are no fees associated with Apple Pay.
There are several ways to pay with Apple Pay, including on websites, in stores, via apps, and Business Chat and iMessages. During checkout, Apple users can enter contact information, payment information, and shipping information quickly and securely.
You can allow your eCommerce customers to checkout with Apple Pay within apps and websites, rather than having them look for their credit cards. A user of an Apple device simply clicks “Apple Pay” on a website, confirms the payment using their iPhone, Apple Watch, etc., and their payment is complete.
6. Google Pay
Merchants pay only transaction fees with credit/debit sales when using Google Pay – there are no separate fees for Google Pay.
Businesses, websites, and apps can use Google Pay to accept payments. Customers enjoy a delightful checkout experience using Google Pay’s APIs.
The Google Pay service lets your customers pay for your products safely and at the touch of a button by using hundreds of millions of cards stored in their Google Accounts.
7. Square
The price per transaction is 2.9% plus $0.30.
With Square, sellers can accept credit card payments with a dongle they insert into their mobile phones. Their software has since been enhanced to support all major payment methods and includes some useful tools for both online and offline businesses. The company even offers a free website builder that can be combined with all of its point-of-sale (POS) systems. Custom websites are also available for a fee.
Accepting Payments Online: A Step-by-Step Guide
1. Ensure that Your Online Payment Gateway is Secure.
A secure online payment gateway can be created in a couple of ways. It is possible to hire an outside developer to create a bespoke gateway or to do so through your website development team. Third-party software can also be used.
Secure gateways should be set up as soon as possible. As your business grows and you handle more transactions, you’ll be saving time on manual processing with automated processes. The security of your website can also affect other things.
Having a large selection of payment methods on your payment portal will reach a broader audience, and your customers will have an easier time sending you money.
2. Provide Credit Card and Debit Card Processing Services.
Paying for online products and services with debit/credit cards remains the most popular method, even as mobile payments become more prevalent.
With established payment providers like PayPal or Stripe, you can accept card payments easily. Visa, MasterCard, and American Express are the most commonly used credit cards worldwide.
3. Recurring billing can be Set Up.
You can invoice and receive payments via recurring billing if you offer subscription plans or ongoing monthly services. There are also recurring billing features in most payment processing software. If you already have a payment processing system in place, sites such as Pay simply provide tools for setting up custom, automated recurring billing.
It is essential to use automation. Invoicing and payments are handled automatically, removing most human error. You won’t need to manually manage your customer base anymore, and your customers can make recurring payments with a few clicks.
4. Mobile Payments Should be Accepted.
Mobile payment apps have made it easier than ever for people to pay with their phones.
Mobile payment systems like Apple Pay are quickly becoming mainstream in the United States. In an industry with an estimated 43.9 million users, not accepting Apple Pay would hurt your business. Other mobile payment apps with decent market shares include Google Pay, Venmo, and PayPal.
5. Invoices can be sent via Email.
Payments can be requested by email invoice. The recipient can access a payment portal through a link in the email or by clicking on a link in the message. This method has some potential downsides: emails are not always reliable, and customers may feel untrustworthy when sending money via email. Many businesses depend on it to process payments but expect a failure rate.
6. Checks can be accepted electronically (eChecks).
You can see the user’s information using payment processing software when you accept eChecks as payment.
It’s an online check payment system. By offering this to your customers, you will be able to speed up the process and make it more convenient than sending paper checks through the mail.
7. Payments can be made using cryptocurrency.
You can reach a broader online audience if you are comfortable handling cryptocurrencies. Crypto payments can be accepted online, invoices can be sent, payments can be requested, and money can be received using go-through apps on sites like Bitpay.
Cryptocurrencies offer unique benefits to businesses due to their decentralized nature. Currency exchange fees and bank handling fees are not incurred when you accept payments worldwide. Fraud is also less likely to occur.
Closing Thoughts
Make money online by accepting payments online. You must make it easy for your customers to make payments regardless of the payment processing software you choose. Having a variety of payment methods makes your customers more likely to complete their buying journey which will automatically boost your company/store.
Learn more about how you can make your online store rank better here.
