How to accept online payments: a road map to getting started
In today’s digital world, nearly every business needs to find a way to accept payments online. That includes even the smallest of businesses today.
Whether you have a brilliant new product to sell through an eCommerce experience, a graphic design firm, a retail brick-and-mortar store that’s expanding, a coffee shop, a dentist office, a yoga studio or, well, just about any small-to-medium-sized business you can think of, how to accept online payments is likely on your mind.
It should be. Loyal customers near and far appreciate not only what you’re selling, they appreciate access, and convenience. An online presence and online payments acceptance is important whether you’re selling goods, or providing a service.
So, where do you begin?
There are many paths in to online payments. The one you choose should reflect what your business needs today, and what you hope for the future. Here are some signposts you’ll discover early on that’ll help guide you in your decisions.
1) What kind of business do you have? (or do you plan to have?)
Will you sell products, offer services or both? How to accept ecommerce payments will hinge on your type of business.
If yours is a service-oriented business with clients, such as a freelance graphic design business, a small agency or a consulting firm, you could try FreshBooks cloud accounting. It gives you an easy, professional way to invoice, bill clients and keep your accounts in order. FreshBooks even reminds clients of past due bills and tacks on late fees automatically, saving you lots of time. The best part is, your clients can pay you online with a click or two, directly from the digital invoice, allowing you to get paid faster.
If you have a service-oriented firm with more complex needs, such as appointment scheduling––think bustling hair salon––you may want to have your online payments integrated with other business operations, which can usually be delivered through integrated point-of-sale systems developed for specific types of business verticals.
[insert image of a retail business]
Retail businesses, those selling things, have the most options for receiving payments via the web. So, when we’re talking eCommerce, start with a basic question. Are you looking to simply extend your storefront or to you want to capture more customers from all over? Thinking about how small or large a business you intend to have is helpful as you can sell goods today through marketplaces, such as Etsy, that offer you not only storefronts, but payments acceptance services as well.
Many marketplace businesses, or say, software systems that help run very specific types of businesses, such as restaurants, are what’s referred to as payment facilitators, or PayFacs—as we call them. These PayFacs often mean that you don’t need to establish a specific merchant account to accept credit and debit card payments online. The benefits to you could be many.
A very small eCommerce business––say, run by one or two people––could be built and hosted through providers such as BigCommerce that typically provide a range of eCommerce day-to-day and growth services, while baking the payments right in to their offerings.. These systems also typically let you set up online payments quickly.
However, if you have a more complex eCommerce business, or if you plan on expanding product lines or growing quickly, you may choose a larger, more flexible payment processor with your own dedicated merchant account in order to have more control over fees and pricing structures. In that case, you may want to discuss your options with your website developer, your business bank or a payment processing provider.
Your service firm or eCommerce business may be subscription based.
Consider service businesses such as gyms or yoga studios that usually offer monthly membership fees. Think about product-of-the-month businesses such as a tea-of-the-month club or a men’s monthly shaver delivery that require monthly subscription fees. Wrap your head around nonprofits that collect monthly contributions.
In all of these cases, a system that integrates recurring payments through direct debits would be smart to incorporate into your online payments system. More specialized services for recurring online payments are typically available either through software shops that serve them or through payment processors with specialized processing services that benefit recurring or subscription payments.
2) What kind of payments do you need?
a) Online credit card acceptance
Regardless of what kind of business you’re running, you’ll definitely want to accept credit card payments, since credit cards and debit cards are the way most customers pay.
Online, if you’re not using a payment facilitator, specialized software system or direct connection to a processor, you’ll typically need what’s called a “gateway,” which helps connect transactions to the card processors who communicate card information through the system. . A gateway is usually built into whatever payment processing system you go with and is invisible to you and your customers. They’re also built into most shopping cart providers.
One major consideration: how secure is the gateway and the credit card processing? Larger payment processors usually have more sophisticated layers of security built in to protect your customers’ data, your business and your reputation––from fraud and breaches.
But let’s take this road farther, because credit cards are the obvious choice in payments. There are many different types of online payments you could accept––again, based upon the type of business you have.
b) Digital payments
You could accept a payment online without a shopping cart, but rather with a digital payment service. In this case, a secure website allows you to open your account and accept a credit card payment from a laptop or a mobile device, as long as you have Internet access.
Let’s say you have a construction business and have gone to the building location to break ground. A customer could give you the first down payment online through a digital payments processing system.
c) Mobile payments
There’s another quite common way to accept online payments on the go. It’s called a mobile point-of-sale system or mPOS. From restaurant delivery to massage therapy to home improvement businesses, an mPOS system could be your best bet.
Basically, with the use of a smartphone or tablet and a dongle, you can turn your mobile device into a payment acceptance device. More evolved mPOS systems can be fully integrated with your other payment systems.
d) eChecks for subscription-based business
Some businesses, such as subscription-based businesses may want to accept electronic checks or eChecks. This type of online payment uses automated clearing house (ACH) to direct debit from your customers’ checking accounts into yours. It’s perfect for subscriptions, recurring payments, memberships and autopay.
That yoga studio and nonprofit we mentioned earlier is primed to benefit from eCheck payments, since the transaction fees are nominal.
Basically, a business sets up an online form that requests the customer’s bank routing number and checking account number, and the payments are set up to occur automatically. Customers can access their account and change their information online.
3) Do you need to integrate business operations?
Online payments can be integrated with all sorts of business operations to help you simplify business. Many payment processing systems are starting to integrate some degree of reporting, inventory tracking and analytics into their systems.
Larger, more sophisticated payment processors, such as Vantiv, will include flexible, more customized integration with your online payments, including customer insights, ordering, scheduling, gift cards and much more. It all depends on the type of business you have today, and where you plan to head tomorrow.
Best of luck starting out on your path to receiving online payments! Hopefully, with a good start, your experience will be a smooth ride.