How To Manage Ecommerce Transactions With Payment Processing

Based on a 2021 report on digital buyers worldwide, just over two billion online shoppers chose to make purchases from the comfort of their homes. But that number will continue to increase, and for ecommerce websites like yours, this means you're likely to see even more traffic as time goes on.

To better serve all these shoppers, your business needs secure and reliable ecommerce payment processing. How does payment processing work, and how can you choose the best one for your business?

In this article, I'll cover the different types of ecommerce payment processors available and a few popular solutions to manage payments for your business.

What Are Ecommerce Payment Processors?

Ecommerce payment processors are systems used to facilitate secure online payments between customers and your company. It allows you to take various popular online payment methods, such as:

• Credit cards
• Debit cards
• eChecks
• Stripe
• PayPal
• Amazon Pay
• Apple Pay
• Google Pay

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The Elements of Ecommerce Payment Processing

Your payment processor and other key elements will conduct online transactions in seconds. But a lot happens during this time. Understanding the primary components can help you better understand how ecommerce payment processing works.

These elements include:

• Payment processor: A financial services provider that conveys transaction history between your customer’s bank account or credit card company and your merchant account.
• Payment gateway: A technological platform that connects your ecommerce website to a merchant services provider to facilitate data transfers between the payment processor and customer-facing website. Although the two are often confused, your payment gateway and processor are unique entities.
• Merchant account: A business bank account that allows you to receive electronic payments from your customers.
• Payment information tokenization: A process that saves your customer’s debit or credit card information as randomly generated alphanumeric codes to reduce security risks.

Popular Ecommerce Payment Processing Solutions

There are numerous payment processing solutions you could choose for your company, each with its strengths and downsides. Choosing a payment processor isn’t a one-size-fits-all endeavor, so you’ll want to take time choosing an option that best fits the needs of your ecommerce platform.

Here are a few popular ecommerce payment processing solutions that you should check out:

1. QuickBooks Online: Cloud-based accounting software for small and medium-sized businesses looking to process payments, manage finances, track expenses, and handle invoicing from one platform.
2. Chargebee: Subscription-based ecommerce payment processor that allows you to securely process payments, streamline order management, and automate recurring subscriptions.
3. Hopscotch: Free digital payment solution focused on invoicing needs for your ecommerce site. They provide customizable invoice templates to streamline and standardize your invoicing process.
4. Freshbooks: Online payment processing system that simplifies invoicing, expense management, and payment tracking and management.
5. Square: A full point-of-sale (POS) system designed for e-commerce businesses or those that sell outside a designated physical office.
6. Stripe: Global payment processor that utilizes machine learning to improve security and conversions.
7. Helcim: Geared toward recurring payments, this processor includes a virtual terminal that turns any computer or mobile device into a credit card processor.
8. Venmo for Business: A free payment processing software for startups or small businesses with limited monthly transactions.

Tips For Choosing A Payment Processing Provider For Your Ecommerce Business

Here are a few quick tips to help you choose a payment processing solution for your ecommerce business:

• Types of payments: Ensure the payment processor is equipped to handle all payment methods you plan to offer your customers
• Customer support: Choose payment systems with robust, helpful customer support options so you don’t get stuck if issues arise.
• International transactions: Check that your payment processor can exchange currencies and handle international transactions if you sell your products globally.
• Security: Verify that the payment processing company has high-security standards to keep customer information secure. Ensure the company practices PCI compliance and utilizes tokenization when processing a customer’s secure payment.
• Integrations: Consider any potential business app integrations that would help streamline your operations. For example, you can integrate Shopify, your POS system, shopping cart apps, or a CRM if you already utilize these for your online business.
• Subscription-based services: If your ecommerce store primarily sells subscription-based services, ensure these recurring credit card transactions will be secure. Also, see if any features make this process easier.
• Pricing: Ask about the types and amounts of transaction fees the payment processor charges. Business owners should ask about monthly fees, processing fees, chargeback costs, and other pricing details.
• Functionality: Evaluate how easy the platform is to use on the front and back ends. Consider how easy or challenging the checkout process will be.
• Mobile payments: Many people do their online shopping from their mobile devices. Check that your payment processor can handle mobile payments while retaining a positive customer experience.

How To Set Up Your Ecommerce Payment Processing

Once you’ve chosen a payment processor, you’ll need to select a payment gateway if you don’t already have one. Then you can apply for a merchant account to start receiving funds.

When you have everything necessary to manage your ecommerce transactions, consider which online payment options your store will accept. Most online stores accept major debit and credit card providers such as Visa and MasterCard, but you could also accept Discover and American Express. Consider digital wallets such as PayPal, Apple, or Amazon, as well as alternative payment methods such as Klarna, Stripe, or cryptocurrency.

Now that you’ve made your decisions, you’ll want to configure your payment gateway by embedding or integrating it into your website. This part of the process can vary significantly based on your chosen payment processing solution. If you’re unsure of how to do it, reach out to your payment processor, who should be able to guide you through the process.

The final step in setting up your ecommerce payment processing is ensuring you comply with payment card industry (PCI) standards. These standards were created to keep customer payment information safe while they shop online, and every company that accepts debit or credit card payments must comply with them.

Which Payment Processing Solutions Do You Prefer?

Have you used one or more of the payment processing solutions listed above? Or did your favorite not make the list? Tell us about it in the comments below!

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• What Is A Payment Gateway & How Does It Work For Your Online Store?
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• How To Choose The Best Payment Processing For Your Ecommerce Business
• Buy Now, Pay Later: Should Your Business Use BNPL Platforms? (With Examples)
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