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. Whether you operate a graphic design firm, have a brilliant new product you want to sell, or want to expand your retail brick-and-mortar store or coffee shop, or yoga studio, you’re not alone in thinking about how to accept online payments. Businesses of all sizes are looking to online sales to expand their reach and increase sales through eCommerce.
At least, they should be. Consumers across the globe have come to expect the access and convenience of online payments . Having a web presence and a way to accept payments online is about more than just increasing your visibility, it’s also about providing a positive customer experience and retaining loyal customers.
So, where do you begin?
There are many paths you can take to arrive at online payments acceptance. The one you choose should reflect both what your business needs today, and what you hope to achieve in the future. Regardless of where you start or where you want to go, there are some big decisions ahead.
This article will identify the major crossroads along the way, and help you navigate the path with signposts to help guide you in your decisions.
1. Pick a platform
Selling online requires a different kind of website than a standard informational website. It has to perform vital functions like cataloguing and managing inventory and accepting payments securely. The specific functionality you need and your comfort level with technology will influence the type of platform you should use.
To determine which path to take at this junction, you need to think about the kind of business you have or want to have.
Will you sell products, offer services or both? Let’s explore some differences between the requirements for a product-based business versus a services based 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’ll need an easy, professional way to invoice and bill clients and keep your accounts in order. You may need the functionality to generate automated past due notices, add late fees automatically, enable customer access for account management, and accept payments online directly from the digital invoice.
If you have a service-oriented business with more complex needs such as appointment scheduling––think bustling hair salon or golf course––you may want to have your online payments integrated with other business operations, which can usually be delivered through integrated software systems developed for specific types of business verticals.
Retail businesses, those selling things, have different needs in terms of eCommerce capabilities. A starter question to ask yourself is how many individual products you intend to sell? The kind of platform you’ll need depends in part on the size of your product catalogue. Selling a dozen or so products doesn’t require as robust a platform as selling hundreds, so a platform that is perfect for a large business, may not make a good fit for a small business. Knowing which platforms cater to your type of business is a good place to start.
Popular turnkey marketplace solutions that manage storefronts for eCommerce retailers, like Etsy, deliver a lot of convenience to inexperienced or smaller eCommerce retailers. But certain aspects like limits on the number of products you can list make them less ideal for certain businesses. Other platforms may not limit the number of products you can have, but charge higher service fees for exceeding a particular number. So determining a ball park number of products can help narrow down your options.
2. Design a website
In eCommerce, your website is your storefront. And like a brick and mortar storefront, you want your online storefront to look appealing to customers, to indicate the types of products you sell or the services you provide, and to be accessible to all.
Choosing the right path at this junction requires taking stock of the vision you have for your site, and comparing that with your technical ability (resources) to bring it to fruition.
Setting up an eCommerce website may be easier for some types of business owners than others. Picking the right website provider depends a lot on your comfort level with website technology like HTML and CSS, and the resources available to you.
If you have a web designer or skilled IT professionals on staff, you may find that a self-hosted solution gives you the freedom and flexibility you need to create the precise look and functionality you want out of your website.
Those without design skills or solid technology resources may find it a lot more challenging and may prefer to use a hosted website provider despite the limitations a hosted solution can present. After all, further limitations are irrelevant if you can’t even get off the ground to start.
Plus, what may feel like a limited number of options to one business can seem like an excessive number of options to another. It’s all about perspective.
With a hosted solution, the number of color choices, styles and themes available to for your website design vary by provider. Some offer a lot of options, but don’t allow for further customizations, whereas others may only offer a few options, but do allow flexibility for customizations. Look into the design templates available among different providers and find out about the ability to customize them before deciding on a provider.
With a self-hosted solution, your imagination and expertise define the limit of what you can create. But you’ll need to know a lot about how eCommerce works to do it well. Don’t forget to take these elements into consideration when designing your site:
- Business contact information and customer support
- Business policies for returns, shipping, billing, privacy, etc.
- Customer reviews
- Site search and product catalog
- Terms and conditions for site use
- Shopping cart integration
- Security features like SSL, PCI compliance, and fraud control
3. Pick a shopping cart
Those new to eCommerce may think that a shopping cart and a payment processor are the same thing. In cases where the payment processor provides the shopping cart software it’s basically true. But ultimately they are two separate components that work together to enable payments acceptance. Just remember, not all payment processors have shopping carts for eCommerce, and not all shopping carts are payment processors, so it’s good to understand the differences.
Shopping carts are aptly named, because they are the virtual equivalent to an actual shopping cart. They are the receptacle customers put their selections into before moving into the checkout lane. The shopping cart connects your website to your payment processor and turns a browsing visitor into a paying customer if things go well, so it’s important to get it right.
Heading in the right direction in terms of shopping carts requires thinking about the customer experience you want to deliver, and the balance between gathering information, and providing a pain-free checkout process.
A 2017 ShopTalk survey by Vantiv and Socratic Technologies found that 77 percent of respondents cited a quick and easy checkout process as their number one concern when shopping online.
When you’re analyzing shopping cart solutions, put yourself in the customer’s shoes.
- How much information would you be willing to share to make a purchase?
- How much time would you spend filling out the form?
- How many times would you resubmit a form to correct flagged formatting issues in dates or addresses?
- If you weren’t sure you would make another purchase in the near future, how willing would you be to create an account and set up a password?
These are all things that can add up to annoy potential customers and make them rethink their purchases or find them on another site.
Other considerations for shopping carts are their ability to integrate features like automatic address and zip code verification (AVS and ZVS respectively), shipping calculators, and customizations in the look and feel so it will resemble your website.
4. Pick a payment processor
Regardless of the type of business, you’ll definitely want to accept credit and debit card payments, since plastic is the way most customers prefer to pay online. And in order to accept credit and debit cards online, you’ll need a payment processing provider.
To find the right provider for your business you’ll need to determine whether you’ll use a direct processor, a payment gateway, or a payment facilitator also referred to as a PayFac or payment aggregator.
Unless you’re using a hosted all-in-one marketplace solution (ie Etsy) where the payment processing is rolled into the other services and handled by a PayFac, you’re going to need a merchant account. PayFac users don’t need a merchant account because the host is essentially the merchant, and your business represents one tiny aspect of a larger merchant account.
A merchant account is how you pay for, and receive payments from credit and debit card sales. The merchant account provider is the one who collects interchange fees for the card brands, submits transactions for approval, and settles them by transferring funds from the card issuing bank to the merchant account. They also provide certain add-on services like card data security and data analytics.
If you’re not using a PayFac, you can set up merchant account with a provider that can also provide your shopping cart software. This is considered a “direct” payment processing solution. The front end of the system that interacts with your customers on your website, is owned and operated by the same company that operates the back end of the payment processing that moves money between the card issuing banks and your merchant account.
The third option is to use what is called a “gateway” in which the shopping cart has the ability to connect to a variety of payment processors on the back end. This configuration gives you the flexibility to pair the perfect shopping cart with the perfect payment processor for your business.
One thing to note about gateways is that adding another player in the transaction flow means adding some additional costs. You will likely have a gateway fee, in addition to payment processor fees. And you may experience a slight delay in technical support if it’s not clear which aspect of the payment processing is causing the problem. Still, these drawbacks can be minor in comparison to the value they can provide for certain businesses.
And once again, we have come back to the central theme that no two eCommerce operations are exactly alike and the number of solutions available make it impossible to give one clear answer to the question, “which eCommerce solution is right for me?”
Hopefully, using this road map will help you to get started thinking about all of the considerations at play. And you can always consult with Vantiv for more information specific to your business. Vantiv has comprehensive solutions for every business, small or large, and offers robust integrations and flexible customizations to tailor solutions to your needs.