As more businesses establish their online presence, the ability to process and accept payments online has become more essential than ever. From ecommerce to service-based companies to freelancers and more, offering quick, seamless online payments can drastically improve user experience and increase sales.
This guide will walk you through everything you need to know when planning to integrate a payment processor, from understanding the various methods to choosing the right one and ensuring your transactions are safe and reliable.
Understanding online payment systems
Online payment systems and processors allow businesses to process online transactions securely. In many ways, processing payments online is similar to processing payments in person.
Like swiping a credit card at a physical store, online payments involve verifying the customer's payment details, ensuring sufficient funds, and completing the transaction. The main difference is that all of this happens virtually on a website facilitated by online payment processors, often integrated into an online store builder platform.
From small businesses to large corporations, managing online payments has become a cornerstone of modern commerce and ecommerce. Globally, digital payments increasingly represent a substantial percentage of transaction volume and value, exceeding 70% in some metrics and growing. The convenience of making a payment from anywhere, on any device, at any time significantly enhances user experience and encourages more customers to complete their purchases.
Who needs to offer online payments?
In today’s competitive market, almost every business can benefit from having an online presence and accepting online payments. Ecommerce stores and subscription services are the most obvious, but easy payments are also essential for businesses ranging from travel, event organizers, consultants, and even local shops expanding their presence online. Providing a convenient and secure way for customers to pay can significantly enhance your revenue potential.
If you’re just starting and building your online presence, knowing how to accept payments online is crucial to your journey. Learn more about entrepreneurship to make your online business a success.
How to accept payments online
Setting up online payments and payment processors requires several pre-work steps, including choosing a business bank account and repricing items, to picking the right processor, and integrating it on your website to ensure smooth and secure transactions. Here’s how to get started:
1. Choose a business bank account
Having a dedicated, separate business bank account ensures your finances are properly managed and separated from your personal expenses. It also makes it easier when you file your taxes, keeping your personal income and business income separated.
Many traditional personal banks also offer business bank accounts, and some may even reduce fees if you have your personal account with them. Reach out to your banking advisor to ask about business bank account options and various promotions.
If you’re starting a new business, setting up a dedicated business bank account is a crucial step. Learn more about how to start an LLC and manage your business finances effectively.
2. Reconsider your pricing
When accepting payments online, you need to factor in transaction fees charged by payment processors. Review your products and adjust your pricing accordingly to avoid revenue loss and make sure to communicate these costs to customers clearly.
3. Choose a payment processor
Choosing the right payment processor is crucial. There are several factors that may be relevant, from which is easiest to integrate with your website to fees and security features as well. When considering options for credit card processing, some include:
- GoDaddy Payments – An easy-to-use solution offering the lowest transaction fees over other leading payment providers and seamless integration.
- PayPal, Stripe, Square – Similar popular third-party processors with reliable security features and integrations.
We’ll go over these in more detail below.
4. Set up payment methods on your website
Once you’ve picked your payment processor, the next step is to integrate them on your website. Most providers, like GoDaddy Payments, PayPal, Stripe, and Square, offer step-by-step guides to help you embed payment buttons, set up checkout pages, or integrate payment APIs. Most even have WordPress plugins, which seamlessly integrate with WooCommerce and WordPress if you built your site using WordPress.
5. Test before launching
Before launching your payment system online, thoroughly test each payment method to ensure everything works properly. Simulate various transaction scenarios, including successful payments, failed payments, and refunds. Most tools like GoDaddy Payments, PayPal, and Stripe have simulators to take you through a customer’s process, making it easy to test various scenarios and the messages and pages your customer will see.
6. Monitor your transaction
Regularly monitor your transactions for security, accuracy, and performance. Most payment processors offer analytics tools to track sales and identify potential issues. Additionally, you can also leverage invoicing software to help you keep track of incoming and outstanding payments and ensure timely follow-ups. Consistent monitoring allows you to keep track of your finances and step in to maintain a high-quality customer experience.
For efficient invoicing, check out GoDaddy’s guide on the best software for invoices.
Choosing the right way to take payments online
Choosing the right payment processor depends on many factors, from where your website is hosted to your business model, customer preferences, and the level of security and convenience you want to offer.
In some cases, it may be better to incorporate only one payment processor to leverage bulk discounting on fees, while in other cases it may be better to incorporate several payment processors and methods to give customers multiple options.
Credit and debit cards are the most common method for online transactions. Whether they are buying products, services, or subscriptions, customers can conveniently enter their card details during checkout, and those can then be further processed by various processors, including GoDaddy Payments, PayPal, Stripe, and Square, which are often considered among the best payment processors.
There are both different ways customers can pay and different payment processors that you can incorporate on your site. Here are some of the most common ones:
GoDaddy Payments
GoDaddy Payments is designed to provide small businesses with an all-in-one solution for processing payments. It offers competitive transaction fees, some of the lowest amongst leading providers, and seamless integration with your GoDaddy website, making it an excellent choice for entrepreneurs looking for a straightforward payment processing solution.
In addition to integrating on websites, GoDaddy Payments also offers GoDaddy Paylinks, a simpler way to accept payments without building a full ecommerce website. They allow you to share a payment link via email, social media, or messaging apps, enabling customers to pay securely. You can also customize the page with your branding, and connect to your domain for a more personalized and memorable link.
Apple Pay/Google Pay
Mobile payments have become increasingly popular due to their convenience and ease of use on mobile platforms and applications. Apple Pay and Google Pay provide a streamlined, contactless payment experience, making buying something easy with a click of a button. Integrating these options on your website, especially on the mobile version, can help you tap into more customers who may be familiar with paying using mobile payments.
PayPal
PayPal is another globally recognized payment processor known for its simplicity, security, and widespread acceptance. It offers convenient payment options for customers who prefer to pay using their PayPal balance, linked bank accounts, or credit cards. Additionally, PayPal provides features such as buyer protection, recurring payments, and the ability to accept international transactions and multiple currencies, making it a versatile choice for many businesses.
Square
Square is a popular choice for small business owners who want to integrate both in-person and online payments. Its easy-to-use dashboard allows you to monitor sales, track payments, and manage invoices. Square also provides robust tools for inventory management and point-of-sale (POS) solutions, making it ideal for retail businesses and restaurants with an online presence as well.
Stripe
Stripe is a developer-friendly payment processor that offers powerful, customizable solutions for online payments. It provides advanced security measures, including real-time fraud detection, data encryption, and PCI compliance. Stripe's API-driven approach allows businesses to fully tailor their checkout process, making it especially popular among SaaS companies, ecommerce platforms, and marketplaces.
Subscriptions and recurring payments
If your business offers memberships, services, or products with recurring billing, setting up automated payments is essential. Services like GoDaddy Payments, Stripe, and PayPal provide comprehensive tools to manage subscription billing.
Features like automatic invoicing, subscription management dashboards, and customizable billing intervals ensure ease of use for customers and consistent revenues, which is particularly beneficial for businesses like streaming services, subscription boxes, software-as-a-service (SaaS), and other membership-based businesses.
Pros and cons of accepting payments on your website
While accepting payments online offers numerous benefits and flexibility, there are also some drawbacks to consider. We’ll go over both the pros, the cons, and things to watch out for as you set up your online payments for your website and business:
Pros of online payments
Online payments can offer a lot to businesses, from flexibility to a better customer experience. Here are some benefits:
Fast payouts
Payments are processed quickly, allowing businesses to receive funds within days. For example, with GoDaddy Payments, you can receive payouts as soon as the next business day. This improved cash flow can enhance growth potential and allow you to quickly reinvest into operations, marketing, or inventory.
Expanded reach
Accepting online payments enables you to serve customers from all over the world, increasing your revenue potential. It breaks down geographical barriers, allowing even small businesses to reach a global audience and sell their products worldwide.
Improved financial and cash flow management
Having a streamlined payment system makes it easier to track income and expenses, improving overall financial management. Real-time reporting tools offered by payment processors allow businesses to monitor sales trends and optimize financial strategies effectively.
Enhanced customer experience
Offering various payment methods creates a better user experience, leading to higher customer satisfaction and increased sales. Some customers may prefer one payment provider over another, or might want to pay using credit or debit cards. Flexible options like mobile payments, subscriptions, and pay links make the purchasing process more convenient and easier to customers.
Cons of online payments
And while there are many benefits, there’s also certain drawbacks to be aware of. These aren’t necessarily blockers, but they are important to keep in mind as you set up your website to take online payments.
Security issues
While most payment processors offer robust security measures, online payments are still vulnerable to fraud and data breaches. A single breach can severely damage customer trust, negatively impact your business’s reputation, and lead to legal issues.
It is important to make sure you pick payment processors that have advanced encryption methods and are compliant with regulations like Payments Card Industry (PCI) Standards and others.
Laws and regulations
Businesses must adhere to various legal requirements, including PCI compliance, GDPR, and even international sanctions. Navigating these regulations can be complex and costly, particularly for smaller businesses without dedicated legal resources. It is always important to consult a lawyer before you expand your business internationally.
Transaction fees
Fees associated with payment processing can eat into your profit margins, especially for small businesses. Processing fees may also vary depending on the payment method used by a customer. It’s important to both know and forecast the fees you will be paying, so you can incorporate them in your business planning.
Chargebacks
If a customer disputes a transaction, it can result in chargebacks, which may cause revenue loss and additional fees. Excessive chargebacks can also negatively affect your relationship with payment processors and potentially lead to account suspension. It’s important to understand the terms and conditions of your payment processors before you integrate them on your website.
Final thoughts
Accepting payments online is no longer just an option but a necessity for most businesses. By understanding how online payments work, choosing the right payment processor, and implementing secure payment methods, you can provide your customers with a seamless, reliable, and secure payment experience. And while there are some challenges, such as transaction fees and compliance with regulations, if done properly, the benefits of expanding your reach and improving your revenue flow far outweigh the drawbacks.
Take the time to research the best payment solutions for your business to make it easier and more efficient to incorporate them. Implementing the right solutions today will set you up for success and growth in the increasingly digital work of commerce and business.
Frequently Asked Questions
Can you accept credit card payments on a website?
Yes, you can accept credit card payments on your website by integrating payment processors like GoDaddy Payments, Stripe, PayPal, and Square. These services offer simple integration options and ensure your payments are processed securely and efficiently.
Are online payments secure?
While online payments are convenient, ensuring secure online transactions is also crucial for building customer trust and protecting sensitive information. Most payment systems ensure security by using encryption and fraud detection tools to ensure transactions are safe and reliable and maintain compliance with modern frameworks.
How much does it cost to accept payments online?
The cost of accepting payments online varies depending on the payment processor you choose. Typically, fees range from 2.9% + $0.30 per transaction for credit card payments, depending on the payment processor. Some processors may offer discounted rates for high-volume transactions or alternative payment methods like debit cards and bank transfers.
What is the safest way to accept payments online?
The safest way to accept payments online is by implementing SSL encryption, fraud detection tools, and using PCI DSS-compliant payment processors and gateways. By picking a reputable payment processor that implements these measures, you can enhance your credibility and provide your customers with a safe and reliable payment experience. Additionally, providing clear privacy policies and secure payment options helps build customer trust. Visit our website to more about what an SSL certificate is and why it is essential for your website.
Disclaimer: This content should not be construed as legal or financial advice. Always consult an attorney or financial advisor regarding your specific legal or financial situation.
