Accepting Online Payments: A Guide for eCommerce Sites

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    In recent years, credit card payments have been growing in popularity both online and in-person. Since some consumers prefer to pay with credit, it is highly beneficial for eCommerce owners to obtain a basic understanding of how online credit card processing works.

    Learning about the benefits, risks, and costs involved in processing credit card payments can help you choose an effective merchant account provider and payment gateway. 


    What Are B2B Payments? 

    Unlike B2C payments, B2B payments are transactions that take place between two businesses instead of a business and a consumer. In other words, currency is exchanged for goods and services between retailers, wholesalers, corporations, and other companies. 

    When it comes to B2B payment processing, they are often much larger in scale and involve a digital or physical invoice. After a purchase is made from one company, a purchase order is issued. Once the terms are approved, the order is processed. A sales invoice is then generated and sent to the buyer for payment due within a set time. 

    Does Your Business Need to Accept Online Payments? 

    For businesses, a credit card processor is essential when it comes to receiving online payments from consumers. PWC statistics from a consumer insights survey show that as many as 45% of buyers used their smartphones to make online purchases in 2020, displaying the popularity of mobile payments

    If you have a website that doesn’t accept online payments, you are probably losing out to your other competitors. With the rise of the global pandemic and convenience of online shopping, processing online payments can make accepting transactions and processing shipments more efficient than ever. 

    In addition, companies that process online payments can offer added flexibility such as recurring payments for subscription services as well as the option to pay for large purchases in smaller installments. Because of this, accepting online payments can increase your sales numbers and lead to greater profits. 

    The Pros and Cons of Accepting Online Payment Gateways 

    Accepting online credit card payments has its own set of advantages and disadvantages as a seller and as a buyer. 

    Pros of Online Payments 

    Some benefits of online payments include: 

    • International sales – Many eCommerce platforms and payment processors automatically convert foreign transactions into your local currency so that you can sell to customers from all over the world. Online payments can help you broaden your customer base. 
    • Boosts efficiency – Electronic payments are a lot faster compared to traditional payment methods like cash and check. They eliminate the need to give out change and can shorten lines in-store. They also reduce the security risks of having a large amount of cash on hand.
    • Easy to set up – Plenty of online platforms like Shopify and WooCommerce make it easy for retailers to accept online payments with little to no coding experience. All you need to do is sign up for an account and follow the steps. 
    • Detailed analytics – Often, payment processors can integrate with existing accounting software or generate personalized reports to give you valuable sales data automatically. This can help you predict sales trends and improve future growth. 

    Cons of Online Payments 

    Some drawbacks of online payments include:

    • Cost of service fees – Unfortunately, businesses will need to shoulder the cost of setting up a payment gateway or working with a payment processor. They often charge service fees per transaction or on a monthly basis that can be less affordable for smaller businesses 
    • Cybersecurity concerns – Although efforts have been made to make online payments safer, such as end-to-end encryption and passwords, there is the possibility that cybercriminals can steal private data and impact customers. 
    • Customer issues – Some customers may not want to pay online due to security concerns or the lack of credit cards. Processing chargebacks and refunds can also be an added expense for your online business.
    • Technological glitches – Although they are relatively rare, it is possible that internet issues and server issues can cause payment errors. These can take several days to resolve as payment gateways update their systems or have temporary downtime. 

    How to Protect Your Business When Making Online Transactions 

    To keep your online transactions safe as much as possible through your eCommerce store, you should try to choose a well-known provider and take key security measures.

    • Reputable providers – To help you detect threats and get your money’s worth, you should do your research before choosing a payment processor. The most popular names in the business will tend to have their own security measures to prevent fraud from taking place, in addition to more transparent pricing. This includes platforms like Shopify, Magneto, and PayPal.
    • PCI compliance – No matter which provider you choose, you should always ensure that your business complies with PCI (Payment Card Industry) standards. This is a set of standards that boosts the safety of customer financial data and addresses vulnerabilities in your system. This can help customers feel more confident when buying things through your website. 
    • End-to-end encryption – Privacy is one of the key concerns with eCommerce credit card processing. Encryption helps ensure that customer data is decoded by the intended party that processes the right key. This helps add an extra layer of security to digital wallets and credit card payments. 

    How to Accept Non-US Based Payments 

    Although there are some risks of accepting international payments, processing credit card payments from international buyers can be highly beneficial for expansion and growth. 

    The easiest and safest way to accept non-US-based payments includes using platforms such as PayPal and Stripe.


    The benefit of using PayPal is that it is accepted in most countries and easy to set up. However, you will need to pay for transaction fees as a business. This can range from 

    1.90% plus a fixed fee for QR code transactions to 2.90% plus a fixed fee for commercial online transactions. You’ll also need to pay another 1.5% fee for international transactions. 


    If you sign up with Stripe, you can receive over 135 currencies online. The interchange fee for credit cards is 2.90% plus 30 cents. Other fees include a 1% fee for international cards, in addition to a 1% fee for currency conversion.

    Factors to Consider When Choosing Payment Gateways 

    Choosing the best payment gateway depends on the unique needs of your business. Some factors to consider include safety, system compatibility, and location. 

    • Safety – Choosing a payment gateway that is well known and comes with safety features can prevent hackers from accessing customer data. There are 4 levels of PCI compliance for merchants depending on your annual transactions and different security standards that come with this. 
    • Location – Not all payment gateways operate in the country that you do business in. It’s best to choose a gateway that can work for your current and future needs, especially if your headquarters is located elsewhere or you plan to expand. Some have better coverage than others, while others may have to comply with stricter legal requirements.
    • Compatibility – If you already have an existing eCommerce platform, you should ensure that the payment gateway you choose is compatible in terms of API functionality and has all the features you need. Some payment gateways appear as a pop-up, while others redirect users to another page. 

    How to Set Up Online Payment Gateways 

    Setting up eCommerce credit card processing for your business is quite simple. You’ll need a merchant account and a payment gateway in order to accept payments. The merchant account is like a bank account for your business to withdraw funds, while the gateway is what connects this to your online store.

    Many companies like PayPal, Square, and Stripe offer integrated solutions for your website. All you need to do is sign up for an account and choose the plan or contract that works best for your business. Depending on the size of your business and transaction volume, you may need to submit other information. 

    Enabling Currency Conversions 

    Setting up currency conversions for online payments can be done through a payment gateway. Depending on the platform you choose, you can go into your website settings and choose to sell in multiple currencies. Usually, currency conversion depends on the market exchange rate at the time of the transaction in addition to a fee.

    Should Your Business Accept Mobile Payments? 

    With the rising popularity of mobile phones, more and more businesses are seeing the value of digital payments made through smartphones. Contactless payments offer speed, security, reliability, and convenience since all it takes is a quick tap of a smartphone against a device. Payments are automatically deducted from a digital wallet or credit card. 

    The Pros and Cons of Mobile Payments 

    If you’re on the fence about accepting mobile payments, this list of pros and cons can help you come to a more informed decision. 

    Pros of Mobile Payments 

    Some benefits of mobile payments include: 

    • Security – It can be argued that some digital wallets can be safer than credit cards. Rather than revealing personal data, digital wallets create a one-time-use card number or token that is given to the retailer instead of sharing the card number. 
    • Safety – With the pandemic, truly touchless options like mobile wallets can be even better than credit cards that require you to enter your pin code or cash that may require even greater contact. 
    • Convenience – In addition to accepting credit card payments, customers on the go would likely appreciate the increased speed and convenience of digital payments if they aren’t carrying enough cash or are in a hurry to make a purchase. 

    Cons of Mobile Payments 

    Some drawbacks of mobile payments include: 

    • Not supported by all phones – Not all models of mobile phones can support mobile payments, so this might be a problem for stores that only offer this payment platform to their consumers. 
    • Security concerns still exist – Although security is a huge priority for mobile payment companies, it is still possible for hackers to access data since digital records can be left behind. 
    • Technological glitches – Like all forms of technology, lost passwords, connection errors, system upgrades, and downtime can negatively impact the payment experience. 

    Frequently Asked Questions

    Understanding the basics of online payments can help businesses gain more insight into the world of payment providers. 

    What are the examples of payment gateway?

    Some popular examples of a payment gateway for online transactions include PayPal, Stripe, and Square.

    What are the methods for processing credit cards?

    To process credit cards, merchants can make use of traditional POS systems, mobile POS systems, and other online payment processors. 

    Is PayPal a payment gateway?

    Yes, PayPal is a payment gateway that processes and authorizes customer transactions so that businesses can get paid.

    What is the difference between payment processor and payment gateway?

    While a payment processor is what handles transactions between the merchant and the financial institutions, the payment gateway is the medium that communicates to the merchant whether the transaction has been successful or unsuccessful. 

    What does API mean in payment gateways?

    A payment API connects a payment solution with an existing application. For a payment gateway to work, it needs to be compatible with an eCommerce website or web application. 

    Payment Gateways In A Nutshell

    Before choosing a payment gateway, it’s important to explore the various features and payment methods that each processor offers so that you can find the one that best suits your needs. Security and flexibility should be two of your top concerns, especially if you are processing credit card payments on an international level. 

    If you are classified as a high-risk merchant, learn about what to do when a credit card processor turns you down and learn more about your payment processing needs on Processing Card!