A Guide to Online Card Payments

by Donna Ryder

Cashless payments are the new normal. Technological advancements have allowed customers to pay for goods and services in-person as well as remotely. There are a number of benefits associated with online card payments. They can offer a more efficient shopping experience for you as well as your customers. They can also save you valuable company time and money in the long run. Continue reading to find out all you need to know about online card payments.

Merchant account

The first step towards setting up online card payments is opening a merchant account. This is an online bank account that temporarily holds the transaction funds until the payment has been authorised by the customer’s bank. It is separate from a business bank account in that its only purpose is to hold the money for a short period of time before it is eventually transferred to your account. Your business needs a merchant account to be able to accept credit and debit card payments online. Most major banks offer merchant accounts. Your merchant account does not necessarily need to be held with the same bank that holds your business account. You may also be able to receive a merchant account from an independent, third-party provider. These companies work alongside banks to provide the exact same service for a lower price. They also tend to offer greater customer service and support in the event of a problem. Online card payments are not cheap. Merchant account providers charge a number of additional costs. These include transaction fees, monthly fees, authorisation fees, early termination fees and chargeback fees. To find out

how to accept credit card payments online, shop around to find a merchant account provider that suits the needs and requirements of your business.

Payment gateway

As well as a merchant account, you will also need a payment gateway. A payment gateway is the bridge between your website and the payment processing network and is required for both online and brick and mortar stores. It captures a customer’s card details and authorises the payment. It is usually offered as an add-on once you have established a merchant account, but independent, third-party providers may also offer both services combined. This tends to be a little more expensive but offers greater flexibility and customisability. It also allows you to benefit from a wider range of features down the line. Merchant account providers also offer both services combined as part of a package deal. These package deals often include electronic invoices, pay by links and the option to install a virtual terminal to allow you to take payments over the phone. Some payment gateways are known for being fussy in terms of which bank cards they can and cannot accept. You must research the different types available to you before making an informed decision as to how to accept credit card payments online. As with merchant accounts, payment gateways also charge a number of additional costs. They typically require a monthly fee and a transaction fee. Most providers limit their monthly fee to a specific number of transactions. You will only be required to pay a per-sale fee if you exceed this set limit. The transaction fee, on the other hand, usually equals a percentage of the value of each sale accepted through the payment gateway.

Payment facilitator

In order to facilitate online card payments, you will need a payment facilitator or a PayFac. This is an external company that allows merchants to accept payments online, in-person and over the phone. A payment facilitator combines your credit and debit card transactions and processes them together directly through their own network. As a result, you are not exposed to any of your customer’s card details. They are great for small or new businesses as they tend to be a little cheaper. Instead of charging monthly or setup fees, they offer a fixed rate price which is usually a set percentage of each purchase made using a credit or debit card. They are also ideal for businesses with poor credit ratings as they rarely involve underwriting or run credit checks beforehand. According to a recent survey, 55% of US consumers used a credit card to purchase goods online in the past 12 months. With such a large majority of customers shopping for goods and services online, cashless payments should be a necessity for any business making the switch to e-commerce.

Payment link

A payment link is an online payment method that allows merchants to request instant payment for goods and services. Payment can be requested via a specialised link or a QR code. The merchant must first create a payment link and share it with the customer. The customer then clicks on the link and is able to make a payment. The merchant will be notified that the transaction has been successful, and the funds will be released. This method provides increased safety and security for both parties involved as each link is backed with a secure payment gateway. Most payment link solutions are protected from fraud and chargeback and can be completed on a smart mobile device. Customers are not required to download or sign up for an additional app or website to make a payment. They may also pay via a variety of online payment methods such as online banking, credit cards, debit cards, and mobile wallets. This contributes to improved customer satisfaction levels as transaction rates are likely to be quicker and more convenient for the consumer. Each payment link generated is also only intended for single use. This renders it valid for the transaction it has been created for and reduces the likelihood of fraud or the money landing in the wrong hands.

Direct Debit

Due to technological advancements in the online retail industry, businesses are now able to offer the service of Direct Debit. Direct Debit is the process of authorising a business to withdraw a set amount from your bank account at regularly agreed intervals. It allows customers to make payments automatically with no need for manual intervention. Businesses are responsible for informing the customer of any changes that are to be made to regularly scheduled payments. This may include increasing or decreasing the amount to be paid or changing the day of payment. Direct Debit is commonly used to pay for monthly bills or transactions, monthly subscriptions, gym memberships, charity donations, and B2B invoicing. It provides a wide range of benefits for the customer as well as the business. It offers increased flexibility by spreading the cost of any outgoings over a prolonged period of time. It also reassures businesses that funds will be cleared in a fraction of the time of traditional payment methods which improves cash flow and saves time and money in the long run.

Online card payments should be a vital component of any business in today’s digital retail landscape. But it can be difficult to know where to begin. By following these steps, you can take the first step towards offering cashless payment methods and boosting your profits today. Whether you are a brand-new small business or just looking to expand your online presence, online card payments can revolutionise your business and boost brand awareness.