How To Accept Payments Online

One of the many lessons from the COVID-19 pandemic is that online payments are here to stay. According to a report by Insider Intelligence, the coronavirus pandemic expedited the digitisation of the payments industry by two or three years. Moreover, not only are digital payments going strong, but transaction value is expected to grow by 16.3% in Europe and 15.2% in the US from 2020 to 2025.

As a merchant, you want to provide a smooth and user-friendly way of accepting payments online. But what are the best ways to go about this? How does payment processing work today? Let’s get into it.



Choose Your Online Payment Methods

You’ll want to accept the most common payment processing methods to achieve the best conversion rates and avoid pesky cart abandonment.

Credit and Debit Cards

Many online shoppers prefer to pay with credit or debit cards, so you should aim to accept all the major cards, including Visa, Mastercard, and American Express. In the past, you needed to open a special bank account, called a merchant account, to accept credit and debit card payments. A merchant account is essentially a middleman between the customer’s bank account and yours while a payment is being processed.

However, today, you can also use payment service providers (PSP) like PayPal, Stripe, and Square. Using a PSP is often easier and cheaper than using a merchant account. For example, with a PSP, you can easily move money into and out of your account to issue refunds, make purchases, and deposit into your business bank account.

Both PSPs and merchant accounts are examples of payment processors – a company that facilitates electronic payments between a business and the bank.

ACH Debit

Also known as Direct Debit or bank debit, ACH debit is a type of “pull” payment. But, once authorised, the company pulls the payment from the customer account without the customer needing further action. To accept ACH payments, you usually don’t need special capabilities; you must provide the customer with your direct deposit information.

Mobile Payments

Mobile wallets like Google Pay and Apple Pay make online payments swift and convenient for customers. Their card information is entered automatically, so they don’t need to complete any extra steps.


Provide an Online Payment Gateway

payment gateway is essentially the digital equivalent of a physical credit or debit card reader. It’s the consumer-facing interface used to collect payment information. And in online stores, payment gateways are the “checkout” portals customers use to enter their card information or login details for services like PayPal.

Use Payment Links

Payment links, sometimes called checkout links, are clickable links or QR codes that take customers to a simple checkout page where they can complete a transaction. The primary benefit of payment links is that they allow you to accept payments quickly but don’t require you to have any additional digital infrastructure, like a website. However, you may decide to use payment links even if you have a website because:

  • Your website doesn’t support eCommerce.
  • You sell through digital channels like social media pages, newsletters, or text messages.
  • You have distinct audiences and want to provide a different experience for each.

Wrapping Up

No matter which online payment method you pick, the most critical part is making the process easy for your customers. The more ways they can pay, and the more convenient you make it, the more likely your customers will follow through on a purchase.