How To Accept Credit Cards Online

So you’ve realized you want to start selling online. Good for you! The ecommerce market is certainly booming. But before you can start raking in the money, you probably have a few questions, like “how do I make a website?” and “how do I accept credit cards online?” Here’s the good news: There are plenty of software options and payment processors to choose from! The bad news? There are plenty of software options and payment processors to choose from. So how do you choose?

As always, there’s no one perfect solution for everyone. You need to know your business (and where you want to go with it) and have a rough idea of what you need. If you have no idea where to start, never fear! In this article, we’ll cover some of the basic considerations about accepting credit card payments online, as well as types of payment processors and how to accept credit card payments online with and without a website. We’ll also discuss some of our favorite solutions for ecommerce and provide resources to help you learn more.

5 Questions To Ask Before You Start

It’s really important, before you dive headlong into any kind of financial investment in your business, to sit down and make sure that you know what you want and what you need. I say that a lot, but with selling online it’s especially important to look before you leap because if you get any component of your setup wrong, redoing it will cost time and money.

So before anything, here are some questions to consider:

  1. How technologically savvy are you? Simply put, are you even able to build and maintain your website yourself? If you’re not exactly a technological wizard, your priority should be finding an easy-to-manage solution. You can also outsource tasks you can’t handle yourself, such as design or even data entry for the creation of products. Of course, if you have an ambitious idea and no ready-made solution exists, or you need a lot of customization, you might need a developer who can work with software APIs to create what you need. You can find freelance developers to help out as you go, but the more high-tech you go, obviously, the more you should consider having a full-time developer.
  2. Do you already have a website? If yes, do you like your website? Would you rather abandon it for a better site with more features? If you already have a site and don’t want to go through the effort of creating a new site to sell a handful of products, payment buttons or plug-ins are better options. If you don’t have a site or you don’t mind nixing your current site in favor of something better, shopping cart software might meet the brief nicely. But of course, you don’t need a website to accept payments online. We’ll talk about all of these options more below.
  3. What’s your budget? When it comes to numbers, you need to look at both upfront costs and monthly (or yearly) costs. How much can you spend at the outset, and how much do you expect to be able to afford on a monthly or annual basis? Keep in mind the more technically advanced your website, the more you can expect to pay to build and maintain it. Likewise, the busier your site — the more products you have and the more sales you make — the more you can expect to pay. Don’t forget the tangential costs, such as hiring a designer or a developer, or data entry, and of course, the costs of payment processing itself!
  4. What are you selling? Whether you’re offering digital goods, subscriptions/services, or retail products, look for service providers that cater to your industry so you don’t have to find creative workarounds. Many solutions are generalized for a broad array of merchants, but with add-ons and integrations to make them more tailored. You can also find payment processors and software that offer ready-made specialized solutions and service plans, such as micropayments for merchants who sell low-priced digital goods.
  5. How comfortable are you with handling security features? If you want to sell online, you have to make sure your website is secure. That means ensuring your site is PCI compliant. The more involved you are in the payments process and the more sensitive information your website handles, the more of a burden you are taking upon yourself. Fortunately, many payment processors and other software providers offer solutions to keep your customers’ information secure and reduce your PCI burden — in some cases, you may not need to do anything at all.

Once you’ve got the answers to these questions and a list of the features you need and want, it’s time to actually start looking at your options. One of your primary considerations should be finding a payment processor. However, depending on your business model, you might want to first look at what kind of ecommerce options work for you and then select a payment processor from the available options.

We’ll begin by talking about payment processors and go on to look at what other software or platforms you should explore.

Types Of Payment Processors

No matter how you go about finding a payment processor — choosing a standalone, going with the default processor included with your shopping cart, or choosing a recommended partner from a software provider — you need to consider what kind of business model the processor uses. If you’ve been here before and read any of my other articles, you know that I am talking about the difference between third-party payment processors versus traditional merchant accounts.

Traditional merchant accounts are very stable. It would take a clear violation of either your contract or card network rules in order to trigger an account termination, and you’re unlikely to encounter a hold on funds unless you’ve had a series of issues with chargebacks or fraudulent transactions. However, most merchant account providers expect you to have an established business and a monthly volume of $10,000 in credit card transactions. Plus, setting up a merchant account will typically take a few days. It could take longer depending on how many processors are on your short list and how much negotiation is required.

Third-party processors are not quite as stable as merchant accounts. That’s because instead of issuing separate accounts for each of their merchants, everything is lumped together in one giant, communal merchant account. It takes very little effort to apply for an account with one of these processors, and you can often get approved and set up to accept credit cards online within a day. Factor in no monthly minimum volume requirements and third-party processors provide a great way for new businesses to take payments. However, the trade-off is that you’ll face greater scrutiny and a higher risk for account holds or terminations, often with no warning. Check out our article on how to prevent merchant account hold and freezes to learn how to reduce your risk.

While third-party processors are riskier than merchant accounts, they are a great option for new businesses who don’t know what sort of volume they can expect and don’t have an established history. Even for established businesses, there are some advantages: namely, third-party processors offer predictable, flat-rate pricing, so you know exactly how much you’ll pay. The best merchant account providers typically offer interchange-plus pricing, which, while clear and transparent, doesn’t make it easy to accurately estimate processing because interchange rates vary.

It’s up to you to decide which type of processor is right for your business. I do want to point out that some software companies (ecommerce shopping carts, point of sale solutions, invoice platforms, and more) often build white-label payments into their solutions. These solutions can take the form of third-party processors or merchant accounts, so make sure you investigate before just going with the default processor. In addition to their native payment processing services, most ecommerce software providers support integrations with an assortment of merchant accounts and third-party payment processors.

Square is our top-pick for third-party payment processor. In addition to predictable, flat-rate pricing with no monthly fees or contracts, Square offers a whole suite of seamlessly integrated apps to address in-person and online sales at no charge at all. eCommerce transactions process at 2.9% + $0.30 each.

For merchant accounts, we recommend CDGcommerce, which offers flat-rate pricing and an interchange-plus option depending on the merchant’s payment volume. There are no monthly minimums and no contracts, just a $10 monthly fee. Low-volume merchants will pay 1.95% + $0.30 for most transactions, or 2.95% + $0.30 for premium, corporate, or international cards. Merchants who process more than $10,000/month are eligible for interchange-plus pricing with a 0.30% + $0.10 markup.

Does Your Payment Processor Include a Gateway?

If you want to accept credit card payments online, it’s not enough to find a credit card processor. You also need a gateway. As the name suggests, a gateway is an intermediary software program that transfers the payment data from your website to the customer’s bank to be approved or declined (and then routes the money to your merchant account).

Many payment processors offer gateways as part of their services. For example, PayPal, Square, and Stripe all offer gateways bundled with the rest of their services at no additional cost. CDGcommerce offers its Quantum gateway as part of its services for online merchants.

However, some processors will charge you a setup fee and/or a monthly fee for use of the gateway. While it’s fair and legitimate to charge for this service (especially if you’re being offered other discounts or freebies in exchange), there’s no reason for you to overpay, either. Make sure you know how much a gateway service will cost if it’s not offered for free.

While it’s rare to find a processor that doesn’t include some sort of gateway access, they do exist. In the event that you find yourself leaning toward one of these processors, you can find your own gateway. Authorize.net is nearly universally compatible and reasonably priced, which makes it a good option for most merchants. (Worth noting: CDGcommerce’s gateway, Quantum, also includes an Authorize.net emulation mode to maximize compatibility.)

Want to know more about how payment gateways figure into your ecommerce setup? Check out our article, The Complete Guide to Online Credit Card Processing With a Payment Gateway, for more information.

How To Accept Online Payments With A Website

A website is a pretty integral part of selling online (but it’s not 100% necessary — we’ll look at some alternatives in the next section). As mentioned above, the first question to consider is: Do I already have a website? Then ask yourself: Do I like that website, or would I rather start over completely? Fortunately, there are solutions for both of these scenarios. For existing sites, you can implement payment buttons or seek out a plug-in or extension that supports ecommerce.

Adding Payments To An Existing Site

best templates

If you’ve used a site builder such as WordPress, Weebly, Wix, or Squarespace, it’s fairly simple to implement online payments. Simply check out the sitebuilder’s available third-party apps, extensions, and plugins. If you already know which payment processor you want to use, you can search directly for an available add-on. Otherwise, you can browse and see what options are ready-made for you. These add-ons will allow you to securely collect payment information from your customers as well as manage the order fulfillment process. Do your research and go with solutions from your site builder rather than third parties, if possible. Check reviews of any plugins or extensions you add and make sure they are well supported and any glitches are fixed in a timely manner.

If you run a WordPress site, WooCommerce or Ecwid could be good starter options. WooCommerce is actually a free plug-in to add to your site, with a basic theme and your choice of payment processors. It’s a very modular setup, so you can choose from a mix of free and paid extensions that allow you to customize WooCommerce to your needs. That includes payment processors, subscription tools, the ability to create add-ons (such as gift wrap for products), and more. Most WooCommerce add-ons are charged on an annual basis, which could require more of an up-front investment than a monthly subscription, so be aware of this fact.

Ecwid is another plug-in designed for WordPress. However, it also works on an assortment of other website-building platforms, including Wix and Weebly, Ecwid does offer a free plan for businesses with 10 or fewer products, but for higher-tiered plans you’ll pay a monthly subscription fee. Ecwid supports a wide assortment of integrations, including payment gateways. With higher plan tiers, you also get access to expanded sales channels.

Wix and Weebly’s website builders can be used for blogging, personal portfolios, and any other purposes. They both offer online store modules. Online stores from Wix start at $20/month with no transaction fees and your choice of processors. Upgrading to an eCommerce plan is fairly simple from within the Wix dashboard and won’t require any substantial reworking. Simply add the “My Store” module to your dashboard, make the upgrade, and start creating products.

Finally, there’s Weebly. Square actually bought Weebly in the spring of 2018, so it’s possible we could see Weebly start to favor Square pretty heavily in the future. For now, though, Weebly’s online store plans start at $8/month (on a yearly plan), with a 3% transaction fee on top of your processing costs. The transaction fee drops off with higher-tier plans, leaving just the monthly fee.

The other way to add payments to an existing site is to look for a payment processor that supports customizable payment buttons. A good payment button creator will give you power over the appearance of the buttons as well as the settings for transactions. The obvious, go-to solution for many is PayPal, which offers a pretty powerful array of tools. PayPal’s buttons are a good option whether you are selling a single product or multiple ones. You can set up payment buttons to allow products to be added to a cart or to go directly to checkout. PayPal even allows nonprofits to create a “Donate” button for their site, which can be configured for one-time and recurring donations.

An alternative to PayPal is Shopify Lite, an entry-level solution. For $9/month plus transaction costs (2.9% + $0.30), you can accept payments on your website by adding payment buttons. The plan also includes access to Shopify’s mPOS app and the ability to sell on Facebook (we’ll talk about that option in the next section, too.) And it’s worth mentioning that Ecwid also supports the creation of custom buy buttons.

While adding payments to an existing site is incredibly convenient and often requires little work, you won’t get quite as many tools as you would with a hosted ecommerce software solution. Which brings us to the best solution if you would rather build a new site or have no website to start with:

Building A New Site With Shopping Cart Software

eCommerce software apps, sometimes also called shopping carts or shopping cart software, are hosted, all-in-one solutions to online sales. Adding an ecommerce feature to an existing website requires you to choose a platform, buy the domain, and pay for hosting, but with shopping carts, you’ll get everything in a single package: online sales and product management, hosting, and sometimes even the ability to buy a domain name directly. Typically, shopping carts will also help you centralize control of sales across multiple channels, so that if you sell on social media, on eBay, or through another channel, you can handle order fulfillment through a single platform. That even includes buying postage (at a discounted rate) and printing the shipping labels. Some shopping carts will offer marketing tools or integrations with marketing platforms, as well as integrations with point of sale systems.

As far as payment processing goes, some shopping carts have opted to include their own white-label payments as a default part of their services. One such cart is Shopify, which offers its own Shopify Payments service (read our review). However, this is just a white-label version of Stripe. Be aware that choosing a payment processor other than the default can incur additional fees.

Generally speaking, even if a shopping cart doesn’t offer all of the features you want, you can search the app market for available extensions and integrations to get what you need. It’s worth researching the available add-ons as well as the native software features.

There’s a lot to consider and compare with a shopping cart. Obviously, you can use a sitebuilder such as Weebly or Wix, which both offer eCommerce modules. Then there are ecommerce-exclusive platforms, including Shopify and BigCommerce, which make it easy to build your site and customize the design (and even offer blogging so you can centralize control of your website).

If you want a whole lot of freedom and have coding knowledge, an open-source platform such as Magento might be more to your liking. Open-source platforms tend to be chock-full of specialized features (particularly if they have attracted active user communities) and you have almost limitless control of your site. A closed-source, SaaS platform is certainly a lot easier and more convenient for business owners who are just starting out and want to go the DIY route.

If you aren’t sure what you want, we recommend you start by checking out Shopify and BigCommerce, both of which are affordably priced for new businesses and offer extensive customer support resources. They also both offer multi-channel sales manage so you can sell through your own site and through other platforms but manage all of your orders from a single portal.

If you’re still curious about what makes a great ecommerce platform, check out some of our other resources!

  • The Beginner’s Guide to Starting an Online Store (eBook)
  • Shopping Cart Flowchart: Choose the Right eCommerce Software for Your Business (Infographic)
  • Shopping Carts 101: How to Choose a Shopping Cart for Your Business (Article)
  • Questions to Ask Before You Commit to a Shopping Cart (Article)

Managing Services, Subscriptions & Other Recurring Charges

A lot of merchants, from accountants and other professional service provideres to lawn care and cleaning services, could benefit from being able to automate recurring charges. And of course, the ability to automate charges is essential for SaaS providers and subscription-box sellers.

Generally speaking, the ability to accept recurring payments — for monthly services or subscriptions — isn’t a default option for payment processors or shopping carts, which tend to be retail-focused. However, you can find plenty of solutions that will work with your existing eCommerce setup. For example, Stripe and Braintree both offer extensive subscription management tools along with their payment gateway and processing services. Add-on services such as Chargify, Recurly, and ChargeBee work with a variety of processors. Zoho Subscriptions and Freshbooks also offer recurring billing tools. PayPal offers recurring billing tools for its merchants; Square offers “recurring invoices” but not a lot of advanced customization for subscription billing.

Proper research will be very important when selecting a provider that offers all of the features you need, whether you require metered billing for usage-based online services, the ability for customers to upgrade to a higher tiered plan mid-billing cycle, the ability to offer free trial periods and extend them, or a way to calculate taxes. Tools that automatically update expired cards can also help reduce failed charges and therefore improve revenues and reduce customer loss.

Accepting Online Payments Without A Website

Most people equate taking payments online with having a website. That is the most common option, but you don’t actually need your own website. Let’s talk about a few of the alternatives for how to accept credit cards online.

Creating Online Invoices

You could create your own invoices in Microsoft Office and send them out via email, but then you’ve got to keep track of which invoices have been sent and which have been paid — and you’ve still got to deal with waiting for the check in the mail. Online invoicing solutions can eliminate every single one of these hassles.

Generally speaking, invoicing software is cloud-based, so you can access it anywhere. You can customize invoices and send them via email (or generate a shareable link to the invoice). But unlike old-fashioned invoicing, these invoices include a link to pay directly in the invoice. Your customers follow the link, enter their payment details, and bam! You get paid much quicker.

Depending on which invoicing software you choose, you can get some powerful features. For example, PayPal allows you to enable partial payments on an invoice if you are willing to accept installment payments. Square’s invoicing links up with the platform’s customer database, allowing you to send recurring invoices and even store customer cards on file to make getting paid even easier. Zoho Invoice, which starts at $0/month, also allows for a customer database, as well as project management (so you can generate an invoice based on the number of hours worked). Shopify offers invoice creation within its platform at no additional charge as well — and this feature is even available on the Lite plan.

For most merchants, Square Invoices may be the most appealing, as it’s available with a Square account at no additional charge. However, Shopify’s built-in invoicing will work for merchants who want to sell with or without a website. Merchants who need project management as part of their invoicing should look at Zoho Invoice.

Using Online Form Builders

So you don’t have a website, but you still need to collect user information and accept payment. Online form builders offer an easy way to do both. Plus, you can post links to forms on social media or send them out via email.

Off the top of your head, you might think of Google Forms, which is free to use and quite advanced for a freemium software. However, it doesn’t integrate seamlessly with payment processors. Your best option, in this case, would be to use PayPal’s embeddable buy buttons and include the button in the form’s submission confirmation page as a second step. However, you’ll have to manually reconcile the payment records versus form submissions.

Subscription-based form builders will cost you money but offer far more capabilities than Google Forms, including direct integrations with payment processors/gateways such as PayPal, Stripe, Square, and Authorize.net. Subscriptions generally work on annual or monthly plans, but one option, Cognito Forms, offers an entry-level plan that charges 1% of the transaction amount instead. (Note, that’s in addition to any processing fees.) Other form solutions worth looking into are Zoho Forms and Jotform. Zoho Forms starts at $10/month and includes unlimited forms and up to 10,000 submissions. It integrates with both PayPal and Stripe. Jotform’s paid plans start at $19/month and are limited to 1,000 submissions, but include integrations for quite a few payment processors, including PayPal, Stripe, Square, and even Dwolla. Cognito Forms’ paid plans start at $10/month plus 1% of the transactions and include up to 2,000 form submissions. Integrations include PayPal and Stripe.

And we haven’t even talked about event registration sites. There are a lot of them, but the one many people are likely familiar with is EventBrite. EventBrite allows you to put all the details of your event online and sell tickets — including setting multiple tiers of admission and promotion cards, automatically setting price changes for registration deadlines, and so on. You can even collect marketing data about your patrons, from their zip codes to how they heard about the event. Your event is searchable from within the EventBrite platform, allowing people searching for something to do to discover your event as well. EventBrite does charge fees on top of processing costs, but these can actually be passed onto event registrees, saving you some money at least.

Selling On Social Media

It wasn’t all that long ago that the idea of being able to buy products directly through social media channels was novel and experimental, but nowadays you can create your own online shop through Facebook, or sell on Instagram or even Pinterest.

With Facebook, you just need a Facebook business page to get started. You can choose your payment processor (PayPal or Stripe) and start manually uploading products, all of which have to be reviewed by Facebook before they can go live. An easier option is to link your Facebook shop to an online store builder such as BigCommerce, Ecwid, or Shopify.

Shopify is actually an interesting solution because, while its core offering is an online shopping cart, it offers a “Lite” plan for $9/month that includes access to its mPOS app, buy buttons for a website, and a Facebook store with automated tools to make the process easier. You wouldn’t necessarily have to go through the hassle of building a website with Shopify just to sell on Facebook, but you still get more tools than you would by going through Facebook directly. Check out our Shopify Lite review for an in-depth look at the plan and all its features.

Selling on Instagram requires you to have a Facebook shop (because Facebook owns Instagram) to create what it calls “Shoppable posts.” That shop can be managed directly via Facebook itself, or via Shopify or BigCommerce as one of multiple sales channels. I’d like to point out that Instagram isn’t available as a sales channel with the Lite plan; you’ll need to upgrade to Shopify Basic at $29/month to be able to manage sales via Instagram.

Lastly, Pinterest allows merchants with a business account to create “Buyable pins,” so you can sell from your Pinterest page. Unlike Facebook, where you can manage the buyable pins from the platform, to sell through Pinterest you will need to go through either Shopify or BigCommerce and actually apply for approval before you can start selling.

Shopify Lite is an ideal option if you want to start with Facebook and maybe add buy buttons to a website. You can upgrade to Shopify Basic ($29/month) to get your own site, plus access to Instagram and Pinterest if that appeals to you.

Selling In Marketplaces

Online marketplaces are a good alternative to having your own website if you’re selling retail goods. You don’t have to pay for hosting or invest anything in web design. You simply create your product listings using the tools provided and publish them. Marketplaces allow you to get your products in front of a large audience without you having to build a stream of traffic yourself. However, the trade-offs are that you generally pay more in fees (listing fees, seller’s fees, and payment processing) than you would with your own website, and you have zero control over the design of the site or even how your products are displayed. Generally speaking, you are limited to using whatever payment processing the marketplace offers as well.

A few popular marketplaces include:

  • eBay
  • Etsy
  • Amazon
  • Jet (owned by Walmart)
  • Ruby Lane

Accepting Payments Through Virtual Terminals 

The final alternative is a bit of a stretch, I’ll admit, but it can be a powerful tool for some merchants. A virtual terminal is a web portal where you can manually enter credit card information to process a transaction. (There’s the stretch: VTs require an internet connection, so they’re technically online payments.)  Virtual terminals are a necessity for merchants who want to accept payments over the phone (or even by mail).

Some payment processors offer a virtual terminal as part of their software package, others as an add-on. These providers include PayPal, Payline Mobile, Square, and Fattmerchant. However, if you want the best value for a virtual terminal, we recommend Square. You pay only the payment processing costs (3.5% + $0.15) and it is interoperable with the rest of Square’s platform.

Beyond Credit Cards: Alternative Online Payment Methods

Credit cards are the go-to for accepting payments online, but they aren’t the only options. For starters, there are ACH bank transfers, which are generally less expensive for merchants to process. They’re often preferred in B2B environments, but some consumers favor them too.

Offering ACH processing as an additional option, especially if you’re in the B2B space, could win you more customers. According to a 2017 Payment Benchmarks Survey by the Credit Research Foundation and the National Automated Clearing House Association (NACHA), ACH transfers currently account for 32 percent of B2B transactions, lagging behind checks, which took the no. 1 spot at 50 percent. Credit cards account for just 11 percent of B2B transactions. By 2020, the survey estimates that ACH will take the top spot and account for 45 percent of B2B transactions.

Despite this, most merchant accounts or even third-party processors don’t offer ACH by default. Some offer it as an add-on plan, others may require you to look for a supplemental option for ACH acceptance.

ACH is far from the only option as far as “alternative” payment processing now, too. Mobile wallets are bridging the gap between in-person and online payments, and card networks have implemented their own online checkout options for cardholders. The major advantage to accepting these options is that they offer an extra layer of security for consumers. For example, Apple Pay on the web still requires biometric authentication before approval.

Some of these alternative payment methods include:

  • Apple Pay on the Web
  • Google Pay
  • Microsoft Pay
  • Chase Pay
  • MasterPass
  • Visa Checkout
  • Amex Express checkout

Apple Pay and Google Pay are fairly widely supported, but you may not see the other options on this list everywhere.

Two noteworthy providers that offer ACH, as well as other alternative payment options, are Stripe and Braintree. However, both are developer-focused platforms, so you’ll need someone with the technical know-how to implement them. Merchant accounts that specialize in eCommerce and provide a solid gateway might offer these options too.

We recommend Stripe because of its extensive developer tools, customizable checkout, and resources for recurring billing. The company also offers round-the-clock customer support (an admittedly recent addition to its feature set). Plus, Stripe is great for international merchants who want to be able to accept localized currencies in Europe and Asia.

Begin Accepting Payments Online

Starting an online store and learning how to accept credit cards online can seem like a daunting task! There are so many factors to consider, but I hope I’ve been able to shed some light on the process and point you in the direction of some good options. A merchant account can give you security and stability, but it may not be the most cost-effective option for low-volume merchants. A third-party processor can get you set up quickly with predictable pricing that often favors low-volume merchants, but the trade-off is account stability. And of course there’s the matter of compatibility: You need to make sure that whatever payment processor you choose offers a gateway compatible with the software (and sales channels) you want to use.

But you also need to have a good idea of what you can afford to spend up front and on a monthly basis and understand your limitations when it comes to technology and software. If you want to go the DIY route, you’ll need to be fairly tech-savvy. Otherwise, be prepared to outsource tasks to designers, developers, and even admin assistants. Some software solutions make it incredibly easy to do everything yourself, others will require lots of hands-on effort to make them work.

If you’re still not sure where to go from here, we recommend you check out our article: The Best Online Credit Card Payment Processing Companies. You can also view our merchant account comparison chart for a quick look at our favorite providers.

Have questions? We’re always happy to hear from our readers, so please leave us a comment!

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