Online payment processing services are the heartbeat of your eCommerce business, and the ability to accept credit cards online can equip you with possibilities to take payments how your customers want to pay. Deciding if online payments are right for your retail business, however, isn’t a matter of “If”; it’s a question of “How?”.
When a transaction occurs on your website and a customer enters their credit card information, the data from that transaction travels through a secure online connection called a payment gateway, where it’s then encrypted and sent to the payment processor. That data is then sent to the credit card network, continuing on to the customer’s issuing bank, all before the money is deposited into your business bank account.
Sound complicated? Good news: it’s not.
Payline makes it easy (and inexpensive!) for businesses to accept credit cards online. Not only does Payline provide businesses with the capability to accept credit cards online, but we go above and beyond, providing you with easier integration with shopping carts, top-notch customer support, and secure solutions to keep your customers safe.
As credit card payment processing becomes increasingly digital, customers expect that businesses will cater to their preferences in making payments. And, with the holiday retail season just around the corner, it is imperative for your eCommerce business to provide customers with what they want.
FAST BREAK: Find success when you take your business online!
In this post, our payment experts researched and compiled everything you need to know about accepting credit cards online — from statistics supporting the need for online payments, to operating a payment gateway — you’ll be able to accept credit cards online in no time with our easy-to-follow guide.
Tip: use the Table of Contents below to navigate the ins and outs of online payment processing to fit your business’s growing needs.
Table of Contents
Important eCommerce Statistics
Did you know? According to Forrester Research, online business transactions are set to reach a whopping $523 billion by the year 2020. In fact, this is nearly a $200 billion increase in online sales from the year 2015.
It’s no secret that consumers’ partiality for the omni-channel experience is a driving force behind the need for more payment opportunities at businesses. The options available to merchants today are varied enough to fit every customer and business need, and therefore, more and more retail businesses are jumping at the chance to accept credit cards online.
When it comes to considering whether to accept credit cards online, consider these statistics:
- 95% of Americans shop online at least yearly
- 80% of Americans shop online at least monthly
- 30% of Americans shop online at least weekly
- 5% of Americans shop online every day
- 34% of businesses sell via their own website
- 16% of businesses sell through Amazon
Of all of these statistics, perhaps the most staggering is that eCommerce is growing by 23% year-over-year, yet 46% of American small businesses do not have a website from which they can accept credit cards online. Accepting credit cards online isn’t just a perk provided to customers — it’s a must-have for your business to succeed. The lack of adequate channels for your customers to make payments for your goods or services is a major red flag, causing even your most loyal customers to look elsewhere to make their purchases. While there are many ways to take payments for your business, accepting credit cards online is among the easiest.
Setting Up a Merchant Account to Accept Credit Cards Online
A merchant account is necessary for any business who wants to accept credit cards online and must be done before your business establishes its online payments strategy. There are four basic steps every business needs to take when setting up a merchant account:
1) credit card network agreements
2) choosing a merchant account provider
3) account setup
4) accepting credit card payments
After determining what credit card payment networks are best for your business (based on terms and fees), you should compare merchant account providers. This allows you to pick a partner that best fits the needs of your business and your customers. When choosing a merchant account provider, there are a few key features to consider:
1) transparent pricing options
2) customer service
3) merchant account support
4) enhanced technology
5) flexibility to choose a plan that matches your processing needs
Luckily for customers that choose to work with Payline, we provide our merchants with total transparency in our processes and pricing. We pride ourselves on working with our customers to create the best experience for their customers (and for their growing business).
Another step in getting set up to accept credit cards online is finding a partner that provides a payment gateway to power your online channels that seamlessly integrates into your website. A payment gateway is an eCommerce application that connects your merchant account to your payment processing to allow your business to accept and process credit card payments online. An online payment gateway is a critical component to powering a fast, flexible, and secure online customer experience.
A payment gateway is what drives your business’s ability to accept credit cards online. This payment processing method securely authorizes credit card payments and allows your business to accept credit cards online through a merchant account (see above). Payline provides a simple-to-use payment gateway service for your business or eCommerce site. While the actual process of using a payment gateway to accept credit cards online takes only seconds from a consumer and merchant perspective, there are a few steps taking place in those seconds after a customer clicks “Order”.
- Encryption: The data the customer provides is encrypted (i.e. converted into a secure code) by the web browser, and then the gateway transfers the transaction data to the payment processor that is used by the merchant’s acquiring bank.
- Authorization: The transaction data is sent out by the payment processor to the card company as an authorization request, and the issuing bank either authorizes or denies the transaction.
- Order Filling: The authorization is processed and sent to the payment gateway. The gateway transmits it to the website, whereupon the merchant completes the order for the customer.
Using the term gateway in the literal sense, think of a payment gateway as being the bridge between the merchant and the payment processor that authorizes the transaction from the card issuer, payment network, or a customer’s bank.
This begs the question: what makes a payment gateway such an important addition to your business?
Gateway payment processing is important insomuch that it adds a layer of security to protect both the merchant and the customer. Not only does this process allow for suspicious activity to be flagged for fraud, it enables the merchant to know that there are funds to pay for a particular product or service. Without this step in the payment process, conducting business transactions would create a complete mess for the merchant.
Following the authorization request, a gateway payment processing system is equipped with the knowledge from the proper party to determine if a transaction can actually occur. Issues that could prohibit a purchase from going through might include an expired card, a closed account, a credit card over its limit, or lack of funds.
From there, the gateway payment processing enables the transaction to go through, and the process continues to the funds settlement stage. After authorized, either as a credit on or a debit from an account (both card-based or non-card based), the merchant will send a settlement request via that payment gateway. Next, the merchant is either given permission to remove funds from an account, or in the case of a return, add funds back into an account.
What complicates gateway payment processing even further is that timing varies between settlement and types of payment products. Based on the approval process from the card issuing company, bank, or payment network, the funds may be removed or returned immediately after the authorization process. But, based on the type of regional regulations for a specific type of transaction, the gateway payment processing authorization may occur at different times.
Accept Credit Cards Online Without the Risk
Data security is the one thing that will make or break any business. With the increased threat of fraudsters infiltrating the eCommerce system, businesses like yours face greater risk in accepting credit cards online.
With the right payment gateway provider, however, your business will be set up for success with the necessary security tools to protect you and your customers from outside threats. Because many threats are evident at the time of the transaction, relying on a payment gateway that integrates the latest real-time fraud solutions can help keep your business online without adding unnecessary risk.
Keeping your business fully protected means having two layers of security in place. To start, work with a processor that leverages technology like tokenization and authentication methods. Beyond secure software and hardware, you’ll want to ensure your payment gateway is integrated into an eCommerce site that relies on enhanced site security features.
One feature to look for when setting up your eCommerce site is an SSL Certificate, which creates an encrypted connection between you and your customers, providing them with an additional layer of trust and ensuring they are comfortable entering payment credentials on your site.
Once the proper security measures are in place, this also gives your business the capability to enable other secure credit card payment processing solutions like subscription billing. Because both of these features allow your business to create card-on-file transactions, it’s critical that your system encrypts the credit card data. Having the right security measures in place also lessens the chance that an error will occur in processing credit cards, which reduces the chances of chargebacks. The more secure your business is online, the more likely you are to retain a loyal customer base.
No matter how your business chooses to accept credit cards, what will determine your ability to scale is the relationships you have with the partners that power your payments experience. A lot of solutions today offer the promise of top-notch security, easy integration, and the best technology, but what sets Payline apart is our ability to focus on what matters most: creating a killer payments experience for your business and your customers.
Think you’d like to give eCommerce solutions a try? Our team created this infographic to help you put your business online. You’ll need to consider:
1) The right site design
2) Shopping cart integration
3) A secure gateway to accept credit cards online
Working With Payline
By working with a partner like Payline to power your merchant account, payment gateway and online payment processing needs, you’ll rest easy knowing you have simple, secure methods through which you can conduct business with your customers. Relying on services like Payline Gateway or Payline Connect gives businesses the versatility needed to allow their customers to pay online. At the same time, it protects business’ bottom line with easy integration options, leading fraud solutions and a number of robust tools to enable a better user experience.
The true value of relying on Payline’s payment gateway services is the ability to offer better subscription billing and enhanced data security to protect your customer’s information. Through its flexible pricing options, Payline’s solutions bridge the payment gap between the merchant and the payment processor in order to allow a transaction to occur through your online channels. The right payment gateway can also help you limit the number of chargebacks — preventing excessive fraud from harming your reputation.
For businesses that need a more flexible and friendly payments partner, Payline offers products to power killer payment experiences everywhere. Unlike other payment vendors who only care about what’s on their bottom line, we care about what’s on your horizon.