How To Accept Payments Online: 5 Steps And Best Payment Processing Providers

If you are going to sell things online then one of your first steps has to be figuring out how to accept payments online. There are a lot of payment options these days for online merchants. Everything from credit card processors to Cash on Delivery. (C.O.D.) The options available to you will depend on your geographic region. Some payment processors only work in certain regions of the world.

In most areas, you have multiple options for accepting payments from your customers. In these cases, it’s always best to have more than one set up so that your customers have choices. Too many can also be bad because then your customer has to stop and think. A confused mind will say no. So don’t overwhelm your customer with options. 

Online Payments Related Terms You Should Know

Before we begin, let’s define a couple of terms that you are going to see throughout this article so that you know what I mean when I use them.

What is a Payment Processing Software

This is software that you install on your website that allows you to securely take payment information and transmit it to the payment gateway. Modern payment processing software does not store any payment information on your server for security purposes. Your payment gateway stores all of that information.

What is Payment Gateway

This is the company that is responsible for actually processing your payment. The popular payment gateways are Stripe, Paypal, Apple Pay, etc. Your payment processing software will connect with one or more payment gateways. 

What Is An Online Storefront

This is a fancy term for “your website that sells things”. Your online storefront is usually running on a server that you have some level of control over. You can install new payment processing software, add new productions, and process transactions.

Why Should You Use Payment Processing Software?

The short answer to this question is that, unless you want your customers to call you each time they want to complete an order and give you their credit card number over the phone, you are going to need payment processing software. The good news is that most payment processing software is free because the vendors charge you per transaction, not per software download.

By incorporating payment processing into your online store you:

  • Make it faster for your customers to complete orders
  • Make it easier for your customers to complete orders
  • Make it more secure for customers to complete orders
  • Make it easier for you to detect and deal with fraud

As an added bonus, most online payment processing software will interface with your payment gateway and allow you to easily research old payments and print out reports for bookkeeping. 

Now that we all agree on the terms we are using, let’s move on the steps you should take to accept payments online.

STEP 1: Setting Up Secure Payment Processing

When it comes to payment processing software, security is paramount. Most top-tier web hosting partners spend a lot of time securing their system against common threats. That being said, you are going to have to do your part as well.

Make Sure You Have A Secure Certificate

The first thing you need to do before you start setting up your payment processing software is to make sure you have a secure certificate. Making sure that your website is served securely has to be done before you do anything else.

Most top-tier web hosting partners make “Let’s Encrypt” certificates available to all websites for free. At SiteGround for example, with your hosting account you get a Let’s Encrypt SSL Certificate to protect your domain and subdomains. This is a great place to start. If you are in more sensitive industries like banking on healthcare, you may want to invest in one of the certificates that not only provide security but also proof of identity. These are more expensive and not really necessary unless it is a standard in your industry.

💡 TIP: About storing payment information locally

Make sure your payment processing software doesn’t store any payment information locally.

If you are using a pre-written module or plugin in one of the major ecommerce platforms, this is handled for you. However, if you are hiring a developer to create you a custom payment processing software package – not a great idea – then make sure that they do store things like credit card information locally in your database. 

STEP 2: Facilitate Credit And Debit Cards

Currently, credit cards and debit cards are the predominant way of paying for goods online. In almost every situation, small merchants are going to pay a fee that is around 3% of the total transaction plus a “processing fee”. The percentage you pay to your payment gateway can get smaller as you sell more but it is usually 3%.

Payment processors like Stripe and Paypal will take a lot of different credit and debit cards. The actual options available to you depend on your geographic region. Setting up one of these processors is the easiest way to get going in payment processing. If you are using WooCommerce as your online store platform, setting up credit and debit card options will be easy. There are several Payment Processors that work with WooCommerce from which you can choose. Check in the following video how to enable them.

STEP 3: Set Up Recurring Billing

If you sell memberships or subscriptions, recurring payments are important to you. They are a bit trickier than one-off transactions. Even so, all of the major payment processors now support them so they aren’t difficult to enable. 

Recurring billing requires regular access to the customer’s credit card number. You do not want to store this information locally on your server. Your payment processor stores it for you on their server. When it’s time, they decrypt the number and then process your subscription for you. Again, there is no reason for you to ever store the payment information on your system.

If you are using WooCommerce to build your online store, watch as I explain how to enable and manage subscriptions in the video below.

STEP 4: Accept Mobile Payments

Mobile payments are starting to take off thanks to Apple Pay and Google Pay. These systems were originally designed to allow customers to pay for goods at a physical store with just their phone. These days though, many online merchants support using a mobile phone to pay for goods and services. Apple Pay and Google Pay are still the leaders but Venmo and PayPal also offer a mobile payments option. 

Mobile payments are attractive to users because neither you, nor the payment gateway actually get their actual credit card number, a one-time number is generated and used for this specific transaction. Because the number is only good for this specific transaction, if it leaks out or gets stolen, the consumer is still protected

Mobile payments are easy to set up because they work through existing payment gateways. If you sign up with Stripe, you get the option of using Apple Pay and Google Pay in addition to the other credit and debit cards supported.

STEP 5: Accept Cryptocurrency Payments

Crypto is the new kid on the block. While most of the mainstream payment gateways do not yet accept cryptocurrencies, it is possible to install payment processing software from payment gateways that specialize in cryptocurrencies. Specifically, Coinbase has plugins for both WooCommerce and Shopify to allow those stores to accept most mainstream cryptocurrencies.

How To Choose A Payment Processing Solution?

So with so many options available, how are non-technical site owners supposed to make a decision on which payment gateways to use and which payment processing software to install? We actually have a detailed video on how to choose the best payment processor for your eCommerce shop.

However, the short answer is:

  • Survey your customers and/or friends and see what credit cards that use
  • Sign up with a payment gateway that processes those cards
  • Look at what other options you may want to add. (Mobile or Crypto)

By following that plan, you will support the payment options that are important to the majority of your customers first and then set yourself up for the future.

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Best Online Payment Processing Providers

Stripe

Stripe Payment Processor to accept payments online

Stripе is the undisputed king of payment processors. It is easy to set up and get going and is supported by almost every ecommerce system available. Its features are the following:

Stripe features table

PayPal

PayPal payment processor to accept payments online

While Stripe may be the current king of payment processing, Paypal is by far the oldest online processor available. As such, it supports more credit and debit cards than any other processor.  That having been said, Paypal’s offering fees are slightly higher.

Still, it’s the original and it is still very popular among both customers and merchants.

Coinbase

Coinbase payment processor to accept payments online with crypto

if you want to accept Crypto – at least for now – you have to use a Crypto processor. There are a few of them out there but at least in the United States, CoinBase is the most popular. While most of your customer base probably won’t have cryptocurrency to spend, if you set up with Coinbase, you can allow those that do buy from you using them. The upside is that Coinbase’s fee is much smaller than the credit card processors.

Coinbase features table

💡 TIP: Read the fine print

The final piece of advice I have for you is to read the fine print. Some payment processors don’t allow certain industries or payments for certain types of goods or services. Before you set up a payment processor, make sure they support you and your industry.

Wrap Up

Accepting payments online used to be a daunting task that required coordination between developers and accountants to get up and running. These days almost any online store owner should be able to set up payment processing and start taking payments from their customers. While it is easier these days, it is still a time consuming task. Many of the payment gateways available will want a lot of information about your company to prove who you are before they will let you start taking payments. 

If you are patient and have all the information you need when you start the process, you can get your payment gateway set up, your payment processor talking to your gateway, and most importantly, your customers paying you for your goods and services.

Lastly, accepting online payments it’s just part of the whole process of setting up an online store. If you are thinking of starting your eCommerce or you are just on your way to make it live, we have created a comprehensive free guide and videos that will help you through the whole process of creating your online store using WooCommerce and start selling online. Download it to get expert guidance and make sure you don’t miss a thing to achieve success!

How To Start Selling Online Free Guide

author avatar
Cal Evans

PHP Evangelist

One of the most admired people in the PHP community, who has dedicated more than 16 years to building the amazing PHP community and mentoring the next generation of developers. We are extremely honored that he is a very special friend of SiteGround too.

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