Top 3 ways to accept payments online

Accepting payments online is critical to the survival of many businesses in today's world of digital activity and ecommerce. Today, we'll talk about how to accept payments online, how the process works, and what the best options are for merchants on the market.

Online payment processing: how does it function?

The flow of an electronic transaction is controlled by online payment processing. It is accountable for its long-term viability, security, and step-by-step performance. Simultaneously, online payment processing is a complex operation that involves numerous financial institutions, web payment tools, and communicators. First, let's go over all of the parties involved in the electronic transaction process.

Merchant account. A merchant account is a bank account established for business owners to collect electronic payments in retail spaces and online platforms using payment cards, mobile payments, and e-wallets. It is the only type of account that allows electronic funds to be accepted, so it is required for accepting online payments.

Merchant account provider. This is a financial institution that provides merchant accounts to businesses. They are classified into three categories: acquiring banks, payment service providers, and online payment gateway service providers. The electronic transaction processing for businesses is completed by a merchant account provider.

Payment gateway. A payment gateway is a web-based application that facilitates electronic transactions. It is triggered whenever a customer clicks the "purchase" button on the website. A payment gateway receives payment data from the customer, encrypts it, and forwards it to the payment processor.

Payment processor. The transaction flow is managed by a payment processor. It verifies a customer's bank account's payment limit, the validity of this bank account, the availability of requested funds to complete the given payment, and finally, it performs a security check. The transaction is either completed or declined after successful verification.

Card association. Card associations are essentially card brands, and their role in the transaction flow is to process their own cards. Visa, Mastercard, and American Express are the most well-known. These brands represent a large network of issuing banks as well as acquiring banks, which provide merchant accounts.

Issuing bank. An issuing bank is a financial institution that provides customers with branded payment cards as well as private bank accounts. Customers can participate in electronic payment processing, including physical and online purchases, thanks to issuing banks.

How does online payment processing work?

At the checkout page, a customer first places an order and then proceeds to the payment page, inputting payment information as well as shipping information. The online payment processing process begins.

The payment data is encrypted and transmitted to the best online payment gateway at the outset. It is routed to the payment processor via a payment gateway.

The payment processor sends the encrypted data to a merchant's acquiring bank.

The acquiring bank communicates with the transaction's card association.

Card association via a banking network necessitates certain information from the customer's card's issuing bank.

The issuing bank responds to this demand by confirming or declining the validity of a customer's identity, money availability, and transaction limitation.

The payment processor then transfers funds to the merchant account. It also informs a payment gateway about the status of the transaction, such as whether it was approved or declined.

The notification is routed through the payment gateway to the merchant and the customer. If an online payment is successful, the funds are transferred to a merchant account.

How to start accepting payments online

To understand how to accept online payments, we must first examine online payment processing. To begin, a business owner must first register as a merchant and open a merchant account in order to be financially permitted to collect money from electronic transactions. As previously stated, merchant account providers are classified into three types: acquiring banks, payment service providers, and payment gateway service providers. Each can provide a merchant account as well as additional merchant services such as a payment gateway, chargeback alerts, fraud prevention, and so on. The decision is influenced by the needs and preferences of the business.

How to set up a merchant account

Recognizing business requirements. A merchant must first define the needs of the business. It will provide insight into which merchant services and solutions would be beneficial. The main factors to consider are payment methods, location and currencies, digital platforms for performing transactions, and transaction volumes processed.

Choose an appropriate merchant account provider. Search for a good merchant account provider after you've defined your business needs and determined which merchant services and solutions are appropriate for your company. We recommend that you keep the following points in mind: merchant services offered, fees and payment structure, legal agreement features, offered checkout experience, simplicity of the onboarding process, and customer support of the provider.

Fill out an application for a merchant account. A merchant's documentation, which varies by provider, the application form itself, and the agreement between a business owner and a provider are usually required during the application process. A merchant account is issued once the form has been processed and verified.

A payment gateway is the second essential tool for participating in the electronic transaction flow. A payment gateway is part of the merchant services chain and can be set up by one of the providers.

How to choose a payment gateway

When selecting a payment gateway, a merchant should consider the following factors:

Payment methods: Choose a payment gateway that provides the best payment options for your company. It would undoubtedly include credit and debit cards. There are also mobile wallets, local payment methods, Google Pay, Apple Pay, and other options.

Currencies: It makes sense to select a payment gateway that accepts payments in the currencies in which the business operates.

Countries: Confirm that an online payment gateway India offers services in the country in which a company is registered.

Transaction fees: One of the first parameters to consider is transaction fees. We recommend comparing transaction fees, monthly or yearly charges, chargeback fees, and charge complexity.

Transaction location: The transaction location does not describe the actual location on the map. It is about the payment's location. Whether it occurs on the merchant's website or is redirected to a different web page for electronic payment.

Recurring billing: Not all payment gateways provide recurring billing. If the company requires this feature for the subscription payment model, this could be a good factor to consider.

Compliances: Security and legality are not under consideration. At the moment, three major global regulations govern how merchants must deal with private customer data.

And, of course, a merchant requires a selling platform on which to install a gateway and connect payment processing.

Accept credit and debit card payments

Credit and debit card payments have long been accepted in online shopping and continue to be the most popular method of purchasing goods and services over the internet. When it comes to accepting online payments on a website or online platform, customers expect a merchant to accept credit and debit card payments as a bare minimum.

4 reasons to accept credit and debit cards payments

Encourage customers to make immediate purchases. Customers today prefer a seamless and integrated payment experience that allows them to complete transactions quickly. Furthermore, credit and debit card payments allow for spontaneous and impulsive purchases.

Enhance the customer experience and satisfaction. Customers can benefit from a variety of bonus systems, as well as chargeback options, when they pay with a credit card.

Examine your customers' preferences. Purchase data, combined with time, location, and profile information, can be a huge marketing help. It is also useful to identify trends and anticipate customer needs.

Keeping track is simple. Purchases with credit cards give the immediate tracking system of sales, which makes accounting the way easier.

Accept electronic money

Accepting electronic money on a selling website is becoming more common as the digital world evolves. Electronic money has a specific value and is transmitted via computer banking networks during electronic transactions.

Electronic money payments are safe and secure, and they are not subject to fraud. All thanks to encryption technology, customer authentication requirements, fraud prevention implementations, compliances, and regulations that financial institutions must follow in order to accept electronic money payments.

Using electronic money allows you to make purchases quickly. In this industry, transaction speeds are extremely fast, almost instantaneous. Apart from that, it is more convenient. The best place for electronic money transactions is the online payment world. It safeguards private data at the highest level and provides the best customer checkout experience.

ACH processing

Another method of accepting payment online is to accept electronic cheques, also known as eCheques. eCheques use the Automated Clearing House, or ACH, to conduct a debit from a customer's cheque bank account and forward it to a merchant's account of a business owner via the payments processor.

Accept payments via mobile phone

Today, mobile payment is a very common way to make a payment. To make a smartphone purchase, a person simply needs to confirm the transaction with their fingerprint. Customers' and merchants' security, transaction safety, physical security of the payment device, transaction speed, and general utility are all ensured by this technology.

Mobile payment data security protocols ensure secure online payment.

What payment option is the best?

In reality, there is no simple answer. The best option would be one that is compatible with the needs of the business and the habits of the customers. A merchant cannot be fixated on a single solution, especially in today's world where technology evolves on a monthly basis.