How to set up online payments for small businesses

What to consider when setting up payment processing

Choosing the right payment processing for your business involves some important decisions.

To begin, it’s necessary to understand the three Ps of payment processing: players, payments process, and pricing.

• Players: There are three main players when it comes to processing credit and debit card payments, whether online, via phone sales, or even in person. On one end is you, the business owner or merchant. On the other end is your customer. In between is a lot of technology that connects the two of you, such as the payment gateway and the payment processor.
• Process: As a business owner, it’s helpful to understand exactly how money moves from your customer to your business. There are two stages to payment processing: the authorization (approving the sale, which usually happens within seconds) and the settlement (getting the money in your account, which can take a few business days).
• Pricing: There are several fees associated with payment processing, charged by each of the players, including the issuing bank, the credit card association (Visa, MasterCard, etc.), the merchant bank, and the payments processor.

How to set up online payment processing with a third-party system?

We know you may have questions swirling in your head: What is a payment processor? What is a payment gateway? How can I set this all up without being overwhelmed?

Now for the good news: How online payment processing works isn’t as complicated as it may appear to be.

Here’s a general breakdown of how to set up online payments for your business:

• Find the right partner: Research and select a reputable payment processor that suits your business needs, considering factors such as transaction fees, security features, integration options, and customer support.
• Create an account with a payment processor: Sign up for a merchant account with the chosen payment processor. Provide the required business and banking information.
• Integrate the steps into your operation: Determine how you want to integrate online payments into your website. Some potential options include using an e-commerce platform with built-in payment integration or integrating a payment gateway into your custom website.
• Compliance with Payment Card Industry Data Security Standard (PCI DSS): Ensure your website and payment processing setup comply with PCI DSS guidelines to protect cardholder data.
• Get started with test transactions: Perform test transactions to ensure the payment processing system works correctly. Experiment with different scenarios, such as successful payments, declined transactions, and refunds, before launching the system to your customers.

Once set up, it’s important to continuously monitor your online payment processing system, review transaction reports, and stay updated on any changes or enhancements offered by your payment processor.

How to set up an online payment system without a third-party system?

Wondering how to set up an online payment form without a third-party processor? It can be a complex task. Here are a few steps you can take:

• Research payment service providers and sign up: Explore different payment service providers (PSPs) and select one that aligns with your business.
• Explore developer resources: Access the developer resources provided by the PSP, which can help you integrate their payment solution into your website or application.
• Establish a secure website: Implement SSL encryption on your website to ensure secure communication between your customers and the payment service provider during transactions. Obtain an SSL certificate and configure it on your website.
• Integration options: Choose the integration method, such as API integration, hosted payment pages, or shopping cart plugins. Follow the PSP's documentation and guidelines for seamless integration.
• Maintain compliance: Ensure your integration adheres to relevant security standards and compliance regulations, such as PCI DSS.
• Go live: Once you have successfully tested the integration, switch to the live or production environment provided by the PSP. Update your website or application to enable real transactions and start accepting payments from customers.

Benefits of online payment processing

From increased customer trust to secure, seamless transactions to merchant protections, business owners can take advantage of numerous benefits by partnering with an online payment processor, including:

• Convenient, secure transactions: A payment processing partner can help you safely and securely complete transactions via end-to-end encryption between your business and your customer.
• Quick response times: Payment processing generally takes a few seconds, helping you complete transactions quickly and efficiently. The money then appears in your merchant bank within a few days.
• Additional protections: The right payments partner can also give you access to various seller protections, from chargeback protection and dispute management to fraud protection and data-security compliance coverage.
• Happy customers: Shoppers expect more ways to pay—and that can be achieved with the right payment partner. From debit and credit card payments to social payment apps and even options like pay later, online payment processing gives customers flexibility, which, in turn, can lead to happier, more satisfied, and more loyal customers.

How to add a payment method to a website checklist

Now you’re ready to create a website with payment options or add payment to your existing website. Once you’ve selected a payment processor, set up an account, and chosen the integration methods, you can:

• Add payment buttons or forms to your website
• Implement security measures
• Perform test transactions
• Start accepting payments from customers

The cost of payment processing

As you may have guessed, these benefits come at a price. There are various costs associated with online payments, collectively called payment processing fees. These merchant fees typically include the following:

• Interchange fee: The customer’s payment issuer gets paid by taking a percentage of each sale. This fee varies depending on various factors, such as industry, sale amount, and type of card used.
• Assessment fees: The fee charged by the credit card association (Visa, MasterCard, etc.).
• Percentage fee: Your merchant bank takes a cut by charging you a percentage fee. The amount here also varies by industry, number of sales, monthly processing volume, etc.
• Authorization fee: The payment processor (who might also be your merchant bank) makes money by charging this fee every time you process a transaction (whether it’s a sale, a decline, or a return). Plus, it can charge fees for setup, monthly usage, and even account cancellation.

Payment processing with PayPal

Accepting payments from online customers requires the right partner. There are many available payment processing options to choose from, including PayPal.

Sign up for PayPal to offer your customers payment processing. Learn more about payments with PayPal.