Way to go!
You’re ready to put the final touches on your eCommerce website.
One of the most important ingredients, past design, is ensuring you have a reliable online payment option for your customers.
There are so many options out there, it’s hard to know which one to choose.
You need to take into consideration multiple factors such as ease of use (how appealing it is to your customers), ease of integration (how easy it is to put on your site), and any costs you may incur by using these methods (yep, most of them have service fees).
Remember, everyone has different preferences, so you’ll want to choose the option(s) that will appeal to the widest range of customers but also work well for you.
And, I know, it sucks that to earn money you have to spend money – unfortunately fees are inevitable – but think of this as an investment into your business.
You’re choosing to implement online payment options so that you can appeal to a wider audience which will ultimately bring in more traffic to your site and thus more income.
In the long run, the benefit will outweigh the cost.
So, let’s get into it. Here’s everything you need to know about getting paid online.
1) Your Website Needs To Be Fire
This may be obvious, but you need an easily-navigable website.
It’s a good idea to look at competitors or websites that have a really good UX (user experience) design to get an idea of what works and what doesn’t.
Like I said, after good website design, setting up a great payment system is next in importance.
Once that’s all ready to go, you need to consider your options.
2) What Are Your Options?
The first – and probably most obvious – payment option is through an online payment gateway. This is pretty much the standard on most eCommerce sites and should be your top priority.
Past this, if you want to choose a different kind of provider, you can opt for a credit and debit card payment system. This is also very basic but may have a bit more of a learning curve.
Another option is to accept eChecks – often done through an ACH (automated clearing house). It’s exactly what it sounds like – a customer inputs their check information and the payment goes through as if they were paying you with a piece of paper. Only it’s online which is pretty cool.
There’s the option of digital payment methods such as ApplePay and Google Pay, which are easily integrated into mobile devices. This is great if you have a mobile site set up, but also great motivation to do so because the one-touch payment options are gaining traction.
Email invoicing may not be as popular, but can still be used. This may be especially useful if you provide services as opposed to products. Your customer gets an invoice to their email and they follow the steps to pay through an online portal and receive receipts instantly.
Recurring billing systems are the go-to for subscription-based services. This takes the guesswork out of when and how a customer will pay and makes it easy for both ends.
Now I know this looks like a lot. Don’t worry, you don’t have to become an expert on every payment option out there.
Luckily there are services that do most of the work for you and even some that group multiple payment methods together for seamless integration into your website.
It’s more than what you’re willing to offer, but also what you’re willing to pay.
Let’s dive deeper into the platforms that you can use.
3) Your Payment Processing System
There are three main parts of online payment processing that are important to understand: payment processors, payment gateways, and a shopping cart (your website).
There are two options when it comes to payment processors: third-party and direct processors. Each has its advantages and disadvantages. Let me tell you about them.
Each option requires you to go through an approval process. One is more difficult than the other, but there are also big risk differences between the two options.
A third-party processor – also known as a payment service provider (PSP) or aggregator – is going to be the easiest to get approval for.
The reason for this is that PSPs group many merchants together, so their risk is low which is why they can provide each of those individual merchants quick approval. These third-party processors also often have flat-rate pricing and work with merchants on a monthly basis (that means that you can choose a different payment processor every month because you’re not tied down).
But, because there are few checks on your financial abilities upfront, these third-party processors will look at your month-end transactional activities much more closely which can lead to a freeze or termination of your account with little notice.
A direct processor – or merchant account –, on the other hand, is quite the opposite.
Direct processors take on a lot more risk upfront when approving merchants because they are considered individual entities. This means that the direct processors take more time to check the financial stability of their merchants before approving them.
But once you’re approved, as long as you don’t break any of the processor’s rules, you’ll be at little risk of an account freeze or termination.
The direct processor is recommended for merchants who have a monthly minimum of $5,000-$10,000 in card transactions. Any less than this and the fees won’t be worth it.
Keep in mind that direct processors will adjust their fees based on industry and other factors, whereas third-party processors offer a flat rate to everyone.
So let’s sum up on payment processors:
Direct processors have a longer approval period and changing fees, but you’ll be at low risk for account holds, etc.
Third-party processors have a shorter approval period, stable fees, and high risk for account holds, but your obligation to the processor is on a monthly basis.
It may be a good idea to start off with a third-party processor until your finances are stable and then consider switching to a direct, more stable, processor.
First off, what is a payment gateway?
A payment gateway – similar to what it sounds like – is the gateway between the customer and the merchant. It ensures that payment information is securely processed for a quick and smooth shopping experience.
The payment gateway approves the customer’s payment details and then sends the relevant confirmation to the customer as well as the merchant.
It’s a pretty simple concept so much so that there are payment processors that integrate this into their system, so you don’t even have to worry about it.
Regardless, it’s still important to understand in the case that you will want to pursue a payment gateway independent of your payment processor.
This seems pretty obvious, but it’s not less important than a payment processing system.
You need to make sure that customers have an easy-to-navigate interface to purchase your product or service.
There’s a reason the digital shopping cart is so popular – because it works.
Make sure that your website has a working shopping cart that’s also easy to navigate. Make sure it’s simple and easy to use.
Now that you have a basic understanding of the technical side of payments, let’s talk about your specific options because there are a lot out there.
4) Online Processing Companies
As I said, you have a lot of options. I’ll give you my top recommendations, but know that there are many more out there.
If you’ve never heard of PayPal, I would like to know which planet you live on.
But in all seriousness, PayPal is a household name for a reason. It’s reliable and offers reasonable costs for its payment solutions.
PayPal is considered a third-party processor. So, as I mentioned above, they have no monthly minimums and no additional fees past their base of 2.90% + $0.30 per transaction, but there is a higher risk of an account hold or termination.
As you may know from experience, you can either integrate it into your website (which may require a bit more of a technical background) or just link to PayPal which will redirect customers to make the payment directly on the PayPal website.
This is something to consider especially when starting out because it can give your customers more confidence that their payment is being processed securely.
If Google Chrome is your main browser, you may have noticed that it offers to store your credit or debit card information securely as it would a password.
This information is added to your Google account and to your Google Pay as a result.
It’s also pretty easy to integrate both on desktop and mobile, and you can even add it to other payment methods like Shopify for a smooth user experience.
This is a great option if your business is already connected to a Google account via email, for example. It will make the set-up process very simple.
Similarly, if you have an Apple account, this may be the simplest route for you.
Although we are talking about eCommerce, if you see yourself branching out into a physical store in the future, it’s a great idea to get Apple Pay integrated from the get-go.
It’s also an easy option for mobile devices and encourages purchases with one-click payments.
And the best part is that there are no extra fees for merchants and it’s easy to set up.
You may be more familiar with Square as a payment option for in-person purchases, but it also has an eCommerce option.
If you’re trying to move your business online and you already have Square at your physical store, this is an easy move to make. And, if you’re starting out online, it’s definitely a viable option.
Similar to PayPal, there are no monthly fees and each transaction costs 2.90% + $0.30.
Regardless of how you run your business, this is a good place to start if you’re thinking about branching out into both the physical and the digital sectors.
Now we’re going to take it a step up.
Stripe is a more diverse payment processor because it offers the option of the standard eCommerce payment integration, subscription service payments, and payments for on-demand marketplaces.
If your business offers multiple services, this may be the best all-in-one solution for you, and it has the same price tag as PayPal and Square: 2.90% + $0.30 per transaction.
Stripe is customizable to your needs and can be adjusted at any time. Whether you decide to offer a new service or want to branch out to a brick-and-mortar store, Stripe has the flexibility to find you the best solution.
Helcim is also a very diverse payment processing platform. Here you also have the ability to take subscription payments, as well as regular one-time purchases, and gives you the tools to manage inventory and other built-in features to help run your business.
If you’re looking for a “payment processing for dummies” platform, this may be the right choice for you.
Since Helcim also offers inventory management, it makes it easy for you as a merchant to track what’s selling when.
To have an account with Helcim there’s a flat monthly fee of $20, and each transaction costs 0.50% + $0.25 + an interchange fee which is a fee that the merchant will have to pay every time a purchase is made by credit or debit card and will depend on the markup per credit card company.
Some people like interchange pricing and others don’t. It’s much more transparent than a standard pricing model, but it can be harder to read on financial statements.
The price may be worth it because with Helcim you have access to a reliable full-service merchant account.
Authorize.net is a Visa solution – this pretty much means that it’s owned and operated by Visa – so it’s a safe option because it’s linked to a stable and recognized financial institution.
This platform offers both online and in-person payment options which, again, is great if you’re looking to expand your business into either of these sectors.
It not only supports major credit cards, but it also accepts digital payment services such as Apple Pay and PayPal.
To start out, your best option is probably a merchant account that has the Payment Gateway only offering. This includes no setup fees, a monthly gateway fee, a fee per transaction, and a daily batch fee.
This may sound like a lot, but if you think about it, Authorize.net offers you an easy solution to accept a wide variety of payment options that can make or break a purchase.
There are other pricing options available but they are more realistic for slightly larger businesses.
Adyen is also a great solution and accepts multiple payment options through a single payment platform.
You will have access to tools that can help you track and manage the money going into your business.
Although there is no streamlined fee, you do give your customers access to hundreds of payment options.
The processing fee will vary by payment method, but there is the benefit of interchange pricing (remember it from earlier?) + a fee per transaction.
Adyen works only with merchant bank accounts, but that may be a motivator to set one up and have your business finances separate from your personal ones from day one.
The options for a processing company may seem endless but each has its advantages. Remember, you can always choose a different company as your needs change, so don’t feel tied-down.
Take a pick of what will give you the best support in the beginning and let’s go from there.
5) Putting It All Together
Now that you’ve set up your website, taken a look at your options, and made a decision for which payment processor to use, you’re ready to go live.
It may feel overwhelming looking at all these options and not knowing which is the perfect fit.
I’m going to be honest with you, you may not find the perfect fit, but you will find the best fit for your current needs.
Continue researching your options by going to each provider’s website and reading more about their offerings.
The hardest part is over. You’ve made your decision, so just go live!
Once you get the ball rolling you’ll have a better idea of what’s working well and what needs some fine-tuning.