When you start anecommerce business, you should think carefully about how toreceive payments online. You need tomeet customer needs andmanage your business’s cash flow effectively. How your customers pay foryour products also determines thetools your business will need (for example, card readers foraccepting payments inperson.)
Popular payment methods include cash, checks, credit ordebit cards, money orders, bank transfers, andonline payment gateways such asPayPal.
Nomatter what kind ofbusiness you run, you need areliable method ofaccepting online payments. Therefore, you should choose your payment processor andgateway carefully.
How Online Payment Systems Work
Itisoften hard tounderstand how thepayment process works, especially thedifference between apayment processor andapayment gateway. Let’s figure itout together.
There are four parties involved with every credit card transaction:
- The customer
- The merchant
- The acquiring bank
- The issuing bank.
The aim ofevery transaction istotransmit money from theissuing bank totheacquiring bank according totheagreement between thecustomer andthemerchant. The payment processor andpayment gateway help toconnect all four parts ofthepayment chain.
The payment processor executes thetransaction bytransmitting data between thecustomer, themerchant, theissuing bank, andtheacquiring bank. Also, thepayment processor typically provides you with acredit card machine andanyother equipment you may need toaccept credit card payments inperson.
Apayment gateway securely authorizes payments foronline stores. Inorder toprotect your customers’ privacy, businesses cannot transmit transaction information directly from your website toapayment processor. The payment gateway acts asaguard between thecustomer’s information andthebanks.
What toLook forinaPayment Gateway
The payment gateway you choose will impact your customers’ overall experience when making apurchase atyour store, andalso determines your workflow. Ofcourse, you don’t want agateway that regularly creates problems foryou andyour customers. But choosing theright one can beoverwhelming. Let’s look atthemain factors tomake theright decision.
Payment Card Industry Data Security Standard Compliance
The Payment Card Industry Data Security Standard (PCI DSS) isasecurity protocol issued bythefive major payment card companies (American Express, Discover, JCB, MasterCard, andVisa) toprotect cardholder data andreduce data breaches. Regardless ofyour business’s size, ifyou want toaccept card payments, you have tofollow thePCI DSS.
Check whether apayment processor complies with thePayment Card Industry Data Security Standard (PCI DSS). Otherwise, you may beatrisk forcountless bad situations, from data breaches toinvestigations into your business. Find out .
Effective fraud prevention
Payment security isavital factor ofapayment gateway. According toa from Fidelity National Information Services, some 38% ofmerchants lost atleast 6%oftheir revenue topayment fraud in2020. Ifyou have asmall business, you are more vulnerable toattacks than larger businesses. Whereas big companies likely have anabundance of
Let’s look atafew ofthemost effective methods toprevent fraud:
- Address Verification Service (AVS): When customers purchase items, they need toprovide their billing address andZIP code. AnAVS will check ifthis address matches with what the
card-issuing bank has Dzfile. Aspart ofacard-not-present (CNP) transaction, thepayment gateway can verify with theissuing bank. - Card Verification Value (CVV): The CVV (or Card Verification Value Code )isthe
3- ǰ4-digit code that isDzevery credit card. This number isonly found Dzphysical cards, sothecardholder must have their card inhand tomake apurchase online. This prevents credit card andidentity fraud because even ifsomeone has acard number andcorrect address, they will beunable tomake avirtual purchase without theCVV. - Flag Large Transactions: Fraudsters may take ashot atmaking large transactions before thestolen card isblocked. Some gateways will flag large transactions andrequire manual approval from themerchant before proceeding.”>Fraudsters will take ashot atmaking large transactions before thestolen card isblocked. Such transactions may require themanual approval from themerchant before proceeding.
- Payer Authentication (3D Secure): 3DSecure adds another authentication step foronline payments. Payer authentication, also called Verified byVisa andMasterCard SecureCode, isanauthentication method that secures online transactions forcustomers. This method allows cardholders tocreate aPIN toconfirm their identity during checkout. Byimplementing 3DSecure, merchants have chargeback protection andlower interchange rates (fees paid between banks fortheacceptance of
card-based transactions). - Risk Scoring: Risk scores use statistical models that are designed torecognize fraudulent transactions based Dzanumber ofrules. During thecheckout, themodel determines ifthetransaction isfraudulent. Ahigher probability ofatransaction being fraudulent indicates that you should verify theorder. Risk scoring tools provide a
case-by-case evaluation andwill flag transactions based Dztherules you choose. Rules can include failing anaddress verification test, weird IPaddresses, use ofanonymous emails, andmore.
Make sure that thepayment gateway you choose implements 3DSecure andcomplies with thePCI Data Security Standard inorder tobest protect yourself andyour business.
Fees
Money means alot foranybusiness, soitisbetter tocheck twice whether you can afford thepayment gateway you want touse. Some may have better features, but they can bemore expensive.
First, find out whether apayment processor charges amonthly fee oraflat
Payment method coverage
Letting your customers pay intheir preferred way isthebest way togain their trust, andearn more income. Ofcourse, traditional credit anddebit cards are still themost common online payment methods, but digital wallets andother alternatives such asApple Pay andGoogle Pay are becoming increasingly popular every day.
Also read: Google Pay forEcommerce Businesses: How ItWorks
How toAccept Payments With 51Ƶ byLightspeed
When itcomes toonline payments, your customers want flexibility. Inorder toprovide convenient payment options, you need tochoose ecommerce software integrated with many different payment systems. 51Ƶ byLightspeed isanexample ofaplatform that supports over 100payment providers.
With somany different options, you could spend hours pouring over thedetails ofdifferent software andproviders.
Tomake this part oftheprocess alittle bit simpler foryou, we’ve gathered alist ofthemost popular (and inour opinion, best) payment systems that . Wehave even outlined some oftheadvantages, disadvantages, andsetup processes foreach one, according tohow customers like topay. Easy, right?
Credit cards
Credit cards are byfar themost popular payment method. Card payments online are similar to
- The buyer chooses thepayment card. The store redirects thecustomer tothepayment gateway.
- The buyer puts inthecard number, card name, andCVV (the special security code Dztheback ofthecard).
- The buyer clicks Pay, andthemoney isdebited from thecard, after which thebuyer automatically returns tothestore page andthepayment system informs thestore: Okay, thepayment was accepted. Money goes toyour account Dzthesame day.
Before you choose anoption(s) forcredit card processing, it’s important toknow that different processing companies have different fees andrates, typically Dza
When choosing apayment system forcredit cards, make sure tocheck thefees andwhether thesystem iseven supported inyour country. Ifyou are selling products with restrictions (like guns, drugs, etc.), you may also belimited inyour credit card payment processing options because some gateways donot permit these types oftransactions.
Ifyou use 51Ƶ, customers can doeverything Dzthecheckout page ofyour store without being redirected toaseparate payment gateway. Technically, thecharges are still processed Dzthepayment processor side, but thecustomer stays inyour store when entering thepayment information. You can unlock this feature byusing Lightspeed Payments, Stripe, WePay, Square, American Express, PayFlow Link, Payments Advanced, andPayPal Payments Pro Hosted.
Lightspeed Payments
Lightspeed Payments istheeasiest andmost
Advantages: Lightspeed Payments has competitive transaction fees (2.9% +$.30per online transaction) compared toother payment methods anddoesn’t have anymonthly orsetup fees.
You can easily set upandaccess your Lightspeed Payments right inthe51Ƶ Control Panel, making iteasy tomanage your payments. Plus, ifyou have aquestion orneed help, you can easily contact theCustomer Care team via thelive chat inthe51Ƶ Control Panel.
Disadvantages: Currently available intheUSonly.
from Dz.
Stripe
Stripe isacustomizable payment method that’s optimized forboth desktop andmobile. Stripe payments work in47countries.
Advantages: 135+ currencies accepted with thecustomizable checkout process, which isvery easy toset upwith 51Ƶ. Nomonthly orsetup fees. You can also set upApple Pay with Stripe tooffer your customers simpler andfaster payments with
Disadvantages: Not all countries are included. Check theavailability foryour country .
Chase Integrated Payments byWePay
Chase Integrated Payments byWePay isone ofthequickest andinexpensive ways toaccept credit cards, debit cards, anddirect bank payments inyour store. Itisavailable formerchants from theUS, Canada, andtheUK.
Advantages: fast andeasy way toaccept payments within your website. Payments andorders are automatically synced, soyou can keep track ofyour business all inone place.
Disadvantages: limited totheUnited States, theUK, andCanada.
Square
Square isa
Advantages: Fast, easy checkout process directly Dzyour site.
Disadvantages: Not all countries are included.
You can also run offline transactions through Square, creating asynchronized store from using theSquare POS inventory. When you’re selling inperson, you can process debit andcredit cards with your smartphone ortablet using the51Ƶ app forSquare POS.
Check thedetailed instructions Dz.
American Express
Thanks toour AmEx 51Ƶ integration, you can set upanAmerican Express payment gateway without having towrite asingle line ofcode into your site. This option isopen tolegal residents oftheUnited States andits territories over theage of18.
Advantages: Securely accepts credit cards directly Dzyour site without having toredirect toanew portal atcheckout.
Disadvantages: Only works forAmerican Express card members with businesses within theUnited States.
Electronic Payment Systems
Electronic Payment Systems are even faster than credit cards. When abuyer chooses topay with their electronic wallet, they are automatically redirected tothepayment site. Then they enter their username andpassword toconfirm thepayment. After that, money transfers directly into your 51Ƶ account.
PayPal
51Ƶ works with asuite ofPayPal gateways, such asPayPal Checkout, PayPal Plus, PayPal Payments Advanced, andPayPal Here. That being said, you can approach setting upPayPal inavariety ofways. We’ll break down one of
Advantages: Seamlessly integrates with online sites forfast, easy payments andsecure checkout. Allows users tomake purchases inavariety ofcurrencies. Itisone ofthemost versatile payment processing options.
Disadvantages: PayPal has lengthy terms ofservice, andtheability tofreeze your account atalmost anytime. There isalso ablurred line Dzwhat PayPal deems obscene material, which can restrict thesale ofcertain products they consider inappropriate.
Manual Payment Methods
Ifyou want toaccept cash, checks, orwire transfers inyour online store, make sure towrite clear instructions foryour customers.
Cash
The simplest andsafest way toget paid iscash, ifyou can meet your customer inperson. This ispossible ifyou offer delivery or
Advantages: Asimple way toget money fororders.
Disadvantages: You get thepayment only after delivery, oracustomer may never pick uptheir order.
Purchased orders andchecks
Purchased orders allow your customers tobuy your items using adocument issued byabuyer toaseller that notates thetypes, quantities, andagreed prices forproducts orservices. Essentially, it’s akind ofcontract between you andyour buyer.
When using these, thecustomer isasked foraPObox address, company name, buyer’s full name, andjob position atcheckout. Purchased orders are then sent toaseller, sothat they fulfill them,and deliver theitems Dztheagreed date. The seller will then send abill orsales invoice forthepurchased items.
Offline check payments require thecheck owner’s full name, checking account number, andbank routing number. You can use them foranykind ofcheck payment you like.
Picking The Right Payment System: The More theMerrier
Asyou can see, there are many different options toconsider, andyou should use asmany payment options aspossible soyour clients have awide variety ofoptions.
For example, it’s good tohave PayPal asapayment method because itishighly secure forusers. However, some people might not have aPayPal account orwant touse their credit card instead. That’s where these other services, like Lightspeed Payments, come in.
When you enable multiple payment options forusers, you help them complete thecheckout process asquickly andpainlessly aspossible with theoption that best suits their individual needs.
Learn more about picking your payment methods inour .
Still Looking foranOnline Payment Option?
Ifyou didn’t find what you were looking forinthis list, besure toexplore the wehave tooffer. The right payment processing resource will depend Dzyour location, demographic, andunique business needs. Besure totake thetime tofully explore your options.
- Save Time andMoney with Lightspeed Payments
- Google Pay forEcommerce Businesses: How ItWorks
- How toAccept Apple Pay andGoogle Pay (And Why ItMakes Sense forOnline Stores)
- How toPick aPayment System For Your Ecommerce Store
- What IsPaypal Shopping Cart?
- 6Top Payment Processing Companies For Ecommerce
- Accept Payments intheEUwith Klarna, PayPal Plus, iDeal, Giropay, Sofort, andSEPA