Navigating the E-Commerce Credit Card Processing Ecosystem

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ECommerce credit card processing can take many forms. Knowing how to navigate this evolving industry requires an understanding of how all the pieces fit together.

In its most basic sense, eCommerce credit card processing refers to any purchase made online. These purchases, referred to as card-not-present (CNP) transactions, are made from a consumer online where the cardholder does not always have the physical card present to complete the sale. Knowing how to manage e-commerce credit card processing also means navigating the different type of CNP businesses.

ECommerce Credit Card Processing Transaction Types

There are two main types of methods for ecommerce credit card processing to take shape. This is either through an eCommerce website or an online marketplace. The first refers to a site managed by an individual merchant to sell their goods and services. Any business that accepts transactions online is considered an eCommerce site. These can be created using a third-party template, or from scratch.

The other method in which businesses sell goods and services is through an online marketplace. The most common examples are Amazon, eBay, and Etsy. These websites host a business’s page and allow them to sell goods and services, as well as offer the ability for consumers to use the marketplace to find similar goods from other merchants. Unlike a traditional e-Commerce site, merchants typically use an online marketplace to host their own store page to help attract customers. This route can help merchants attract business they otherwise might not get since their products can better show up in the marketplace search.


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Fees Associated with ECommerce Credit Card Processing

One of the biggest challenges associated with eCommerce credit card processing is the fees for accepting cards. Traditionally, there are three types of fees associated with eCommerce credit card processing, including flat fees, incidental fees, and transactional fees. It’s important for businesses to know the differences for each of these fees to determine what types of fees they should expect and which ones should raise red flags.


Flat Fees

These eCommerce credit card processing fees occur on a regular basis and are typically charged via a payment gateway. Regardless of how many payments are processed, this type of eCommerce credit card processing involves charging a specific amount that usually occurs on a monthly basis. ECommerce credit card processing fees often come with a minimum fee that covers the basic services — such as PCI compliance and other upgrade fees — provided by your processing partner.

There are also other flat fees to consider that businesses may need to consider. This can consist of add-on fees that might include: fees to lease/purchase a payment terminal and insurance fees for those terminals. There are also junk fees, which should raise red flags when presented by any eCommerce credit card processing provider. Junk fees include fees for terminating a service early, annual fees, fees for providing online statements and reporting, and set-up fees. These “fees” are typical methods to simply make money from businesses and should be avoided.

Of course, there are more fees to be aware of. Flat fees that businesses may encounter what’s referred to as incidental fees. These fees are often hard to track and can surprise businesses when they hit. This includes fees such as address verification fees to verify a customer’s credentials, a retrieval request fee, chargeback fees, and fees for not paying the other flat fees. These are known as avoidable fees that businesses should always keep track of when they show up a statement.

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Non-Fixed Fees

These fees can be a bit less predictable for businesses since they are applied for each transaction. Instead of paying fixed fees for payment processing services, transactional fees are per purchase. These fees vary based on two factors: Interchange fees and transaction volume each month. Interchange fees are determined by credit card companies themselves. Fees per transaction vary from month to month but are also non-negotiable between the business and their payment partners.

Regardless of which eCommerce credit card processing solutions businesses choose, they should work with a processor that offers transparent pricing models. For example, Payline relies on an Interchange-plus pricing model that provides merchants with straightforward fees that are tailored to match the needs of each individual business.

ECommerce Credit Card Processing Payment Options

When accepting payments online, businesses have the flexibility to accept payments using a variety of methods. This includes credit/debit, mobile (Apple Pay, Samsung Pay, Google Pay, etc.), and digital payment methods like PayPal. As referenced above in the fee section, each of these types of fees has varying types of charges associated with each of them. Those fees are established by each individual company and are part of agreements made with a business’ payment processor.

To accept these payment options business must have all the necessary payment options to power their eCommerce credit card processing. This includes the right payment gateway integration, the ability to enable electronic invoicing and virtual terminal capability. Here’s how those three components work:


  • Payment Gateway Integration:  A payment gateway is a bridge between the merchant and the payment processor that authorizes the transaction from the card issuer, payment network, or a customer’s bank. Proper integration of a payment gateway adds a layer of security to protect both the merchant and the customer. A payment gateway is necessary for any business that accepts payments online. When a customer provides their credentials, the payment gateway ensures the data is sent to the processor. From there, the processor passes the payment through a merchant account in order to complete the transaction.


  • Electronic Invoicing: Some businesses may rely on e-invoicing to charge customers for their goods and services. This is when the business sends a bill via an electronic format. For recurring billing methods — such as subscription business models — this payment processing option allows businesses to continually keep customers up-to-date with when and why they are being charged.


  • Virtual Terminals: A virtual terminal enables a business to enter payment information on behalf of a customer for CNP transactions. These are commonly used for orders made over the phone or by mail. Unlike a traditional CNP transaction, the merchant authorizes this purchase on behalf of the customer.

Choosing the Right ECommerce Credit Card Processing Provider

There are three things to consider when choosing to accept credit cards online at your business: Cost, flexibility, and speed. Each of those three components is critical in enabling a better payment experience for businesses and their customers. Businesses should start by finding a payment processor where rates are flexible, competitive and transparent. After a processor is chosen, businesses can find the right gateway solution that can enable the rest of the necessary payment options mentioned above.

Regardless of which route a business chooses, eCommerce credit card processing should help businesses streamline their revenue flows and accept more payment methods. With the right payment processor partner on your side, you won’t have to worry about unnecessary fees, complex integration methods or hidden costs. The right eCommerce credit card processing partner takes the hassle out of the equation so you can focus on growing your business and your customer base.


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Anna Kragie is a content contributor for Payline Data. She previously wrote for, as a Sr. Content Producer, where she focused on financial services and payments innovation, fraud and security, emerging payments, and FinTech news, research and thought-leadership content across the payments industry.

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