How to accept credit card payments online

How to accept credit card payments online

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In the grand scheme of payment options, cash transactions have largely fallen out of favor. They’ve been on a steady decline for years — and in their wake, credit cards have taken the throne.

But customers aren’t just physically swiping their cards more often, they’re also using them online like never before. As eCommerce increases, many small businesses are asking themselves: How can I take advantage of this opportunity?

In this guide, we’ll answer this question and explain everything you need to know about accepting credit card payments online.

Why accept credit card payments online?

73% of people made an online purchase in the past year in 2023

Whether expanding a brick-and-mortar store or starting a new business from scratch, merchants have every reason to embrace online credit card processing.

Simply put, eCommerce’s meteoric rise is too big to ignore — and without question, the COVID-19 pandemic was a contributing factor. In 2020, experts estimate it accelerated online retail adoption by at least five years. And yet, years later, the upward trend continues.

Consider these notable statistics:

  • According to a 2023 study, 73% of people said they made an online purchase in the past year, compared to just 46% in 2019.
  • Per Forbes, 34% of people shop online at least once a week.
  • Globally, retail eCommerce sales will grow $1.6 trillion by 2027. At that time, 23% of all retail purchases will be online, compared to 20% today.
  • Overall, between 2021 and 2027, annual eCommerce sales will jump 59.8% — a total increase of nearly $3 trillion.

The point? Expanding your horizons and accepting credit card payments online can be a big opportunity to grow your business. However, the inverse is also true: If you’re not embracing online payment, you risk losing out on an unlimited pool of potential customers.

Benefits of online credit card processing

The advantages of online payment solutions aren’t just theoretical. In fact, there are several tangible ways your business can benefit:

1. Increased sales and revenue

Customers can make purchases quickly and easily from anywhere at any time and on any device. This convenience often leads to more frequent orders and higher sales volumes, thereby raising revenue. And, with the ability to pay instantly, consumers are more likely to make impulse purchases.

As an added benefit, online credit and debit card payments can improve your cash flow by providing faster access to funds. Whereas a debit card transaction is typically settled immediately, credit card transactions normally take a few days. This is often faster than other methods like checks or bank transfers, which may need weeks to clear.

2. Better customer experience

Compared to in-store shopping, eCommerce is a fast and simple process. Your entire catalog is literally at the customer’s fingertips, allowing them to browse from the comfort of their home — or anywhere they happen to be.

Leading online payment solutions offer a streamlined and user-friendly checkout experience with payment method variety. Aside from credit and debit card transactions, they can also accommodate digital wallet payments and buy now, pay later options.

Plus, built-in security features like encryption protect credit card information during the transaction. This builds customer trust and confidence that their data won’t fall into the wrong hands.

3. More growth potential

With billions of digital shoppers worldwide, businesses that accept payments online can reach a much larger audience. In other words, they’re not limited by regional proximity and can sell to virtually anyone. This, in turn, can lead to more sales opportunities.

Whereas brick-and-mortar locations contend with long lines and busy storefronts, online payments are easily scalable. More simply, they can handle increased transaction volumes over time. This flexibility makes it easier to expand business without significantly increasing overhead costs.

4. Automated recurring payments

Some online payment systems allow you to keep debit and credit card information on file. This enables you to set up recurring payments and offer subscription-based services, creating a new, predictable revenue stream.

Repeat billing can also enhance customer retention by providing a seamless payment experience for ongoing services or products. Customers don’t have to remember to make a regular payment; likewise, you don’t have to process the transactions by hand. The system does it automatically, allowing you to focus on other aspects of your business.

5. Access to customer data

Online payment systems collect data on customer purchasing behavior, preferences, and trends. Analyzing this data can provide valuable insights to inform marketing strategies, inventory management and more.

Additionally, data allows you to build stronger relationships by offering relevant products, services, and communications. This not only fosters loyalty but also translates into long-term repeat business.

Ways to accept online payments

person sitting outside using their credit card and laptop to make an online purchase

By now, you’ve learned why online credit card processing is worthwhile — but how does it work? Before getting started, there are three essential pieces you need:

  • An online storefront: Think of this as the digital equivalent of your brick-and-mortar store. It’s where customers view your products or services and make purchases. You might host it on your business website or as a separate shop on an online marketplace (like Etsy, for instance).
  • A payment processor: In short, processors collect payment information and communicate with the customer’s card network and their issuing bank account. They’re responsible for transferring funds between these parties and into your merchant account — but more on that later.
  • A payment gateway: Basically, a payment gateway is an online interface that facilitates the debit or credit card transaction. It’s how customers input their payment information and place orders, like a card reader to a physical point of sale (POS) system.

These are bare necessities every merchant needs to accept credit card payments online. From here, there are several ways to proceed:

Basic online payment methods

There are several straightforward and user-friendly options for businesses looking to start accepting online payments quickly. They’re generally limited in functionality, but these payment solutions do the trick:

  1. Online invoices: Merchants can use digital accounting software to send invoices, track unpaid bills and automatically accept credit and debit card payments.
  2. Direct payment link: You can also generate a payment link to specific products or services and share them through social media, email or text. This makes it easy for customers to pay without jumping through hoops.
  3. Mobile payment apps: Platforms like Venmo, Cash App and PayPal allow you to accept payment through mobile devices.

Merchant accounts and payment gateways

For more robust online credit card processing, businesses use a combination of merchant accounts and payment gateways.

A merchant account is a special bank account that allows you to accept credit and debit card payments online and in person. It holds funds before transferring them to your primary business account. You normally obtain this from a bank or financial institution, but you may also acquire it from a merchant services provider or payment processor.

This works in tandem with a payment gateway, which not only collects payment information but also provides other essential services, such as:

  • Encryption
  • Authorization
  • Fraud detection
  • Data collection

Here’s how this payment method works from start to finish:

  1. The customer places an order and inputs their debit or credit card information.
  2. The payment gateway encrypts the data and sends it to the payment processor.
  3. Your payment processor routes the information to the customer’s bank for authorization.
  4. Once authorized, the processor transfers funds from the customer’s bank account to your merchant account.

Best of all, it happens in a matter of seconds.

All-in-one payment service providers

A comprehensive payment provider bundles multiple credit card processing services into one solution. That way, you don’t have to obtain a payment gateway or merchant account separately.

Better yet, you often don’t need a merchant account at all. Why? Because many merchant services offer it as part of the package, which can include:

  • Online credit card processing
  • Payment gateways for eCommerce sales
  • POS systems for in-store transactions
  • Analytics and reporting tools
  • Security and compliance capabilities

Overall, the payment process works just as it would with multiple vendors. But, because you’re working with just one partner, there’s less administrative effort involved on your end.

Accepting online payments: Tips and best practices

No two payment solutions are the same. Choosing the right method isn’t simple, but it’s easier if you know what to do. Let’s review a few key considerations:

1. Research your options

Due diligence is important. Whether choosing a payment processor, gateway vendor or all-in-one payment provider, vet each company thoroughly before deciding. Here are some factors to keep in mind:

  • Compliance: Businesses that handle card data must comply with the Payment Card Industry Data Security Standards (PCI DSS). Even though your processor may be at fault if a customer’s information is exposed, you may still be liable. The best way to mitigate this risk is by ensuring your vendor has a proven track record of PCI compliance with documented protections to prove it.
  • Support: Don’t let service outages and errors disrupt your business. Look for a payment provider with dedicated customer support teams who can answer your questions and troubleshoot problems. With Sekure, you can trust our Payment Experts to lend a hand whenever and however you need it.
  • Compatibility: The payment gateway should easily integrate with your digital storefront, whether it’s your primary website or online marketplace. This ensures a smooth transaction process without any technical errors.
  • Pricing: Of course, the pricing structure can make all the difference. Compare fees between each vendor to see which offers the most competitive rates. However, if that seems overwhelming, you can let our Payment Experts do the work for you — we’ll even negotiate lower rates on your behalf!

2. Prioritize payment security

According to Experian, 55% of consumers say security is the most important part of their online experience. Any payment provider worth its weight in gold will protect transactions using some of these essential capabilities:

  • Encryption: This obscures payment information at the point of sale, ensuring it can’t be read if it’s intercepted or viewed at any part of the process.
  • Tokenization: Similarly, tokenization replaces card details with other symbols, retaining only the necessary information.
  • SSL certificates: “Secure Sockets Layer” is an internet encryption protocol, which is a technical way of saying it protects sensitive data. Adding an SSL certificate to your website or checkout page will secure the connection and show users their information is safe.

Bonus tip: If you offer a service, document that it was provided. For example, you can ask your customer to review and sign a work order. This protects you if they try to dispute the charges on their card.

3. Optimize the checkout experience

The last thing you want is for someone to abandon their cart because the checkout process is too cumbersome. Here are some tricks you can use to create a better online shopping experience:

  • Minimize the effort: 25% of shoppers abandon their cart when asked to create an account. Extra steps like that slow down the checkout process, making customers put more effort into the transaction. Instead, give them a “guest checkout” option, which doesn’t require additional steps.
  • Ask for less information: Fewer form fields can expedite checkout and make it easier for customers to complete the transaction. Ask only for what’s necessary and nothing else.
  • Use an integrated payment gateway: Integrated gateways facilitate the transaction on the same website, whereas a redirect gateway forwards the customer to another. The latter can be a more tedious experience, so opt for the integrated method.
  • Offer multiple payment options: Giving your customers the freedom to use their preferred payment method can make the difference between a positive and negative checkout experience. Look for a solution that lets you choose between various options.

Understanding online payment processing fees

Unfortunately, online credit card processing isn’t free. There are several costs involved; some of them are one-time expenses, but others are ongoing.

At first, you may have to pay an initial fee to set up your merchant account and payment gateway. There are also sometimes monthly fees for maintaining your gateway, depending on the vendor.

No matter what, there are also three main types of credit card processing fees associated with online transactions:

  1. Interchange fees: A small percentage of each transaction is paid to the credit card company in exchange for facilitating the payment.
  2. Assessment fees: The card network may also charge a fee to cover operating expenses.
  3. Processing fee: This is a small percentage paid to the payment processor, like Square or Helcim, for their services.

These costs can undermine your profitability. The good news? There are many ways to save on credit card processing. For instance, with Sekure’s Edge program, you can pass fees on to customers and maximize your margins. That way, you take home more of what you earn.

Expand your horizons with Sekure

Embracing eCommerce can take your business to the next level. With more sales opportunities and a wider reach, you’ll rise to new heights and maximize your brand’s potential. But first, you’ll have to get your online credit card processing up and running.

That might seem daunting. Luckily, you’re not alone — we’re here to help you every step of the way. At Sekure, our Payment Experts can simplify the search process by learning your business needs, identifying the right solutions and answering every question.

The best part? You have our Rate Sekurity Guarantee,® which means you’ll always get the best payment processing rates available. We’ll negotiate on your behalf, eliminate hidden fees and amplify your business savings.

Ready to accept credit card payments online? Reach out to our team to get started.

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