How to Accept Online Payments

While payment is only a single step in the customer journey, it’s the crux of the entire shopping experience. The critical moments after a shopper adds items to their cart and enters the payment process are make-or-break for your business. Here’s everything you need to know about how to accept online payments — and make transactions as smooth as possible.

Consumers prefer flexible payment methods; they want the ability to pay how, when, and where they want. For online businesses, success depends on catering to diverse customer segments and their many payment preferences like digital wallets, mobile payments, buy now pay later (BNPL), and more. When you embrace online payments, you can:

• Expand your customer reach: Digital payments remove geographical boundaries, allowing you to sell to local and global customers.
• Improve cash flow: You get paid in seconds with online transactions — a significant speed advantage over waiting for checks or manual processes.
• Boost security and fraud protection: Online transactions have payment processors in place that use encryption, tokenization, and artificial intelligence (AI)-powered fraud detection to keep customer data secure.
• Enhance the customer experience: Online payments are usually fast and hassle-free options. They contribute to a great shopping experience.

When a customer clicks the “pay now” button, a lot happens behind the scenes in just a few seconds. Once a customer provides their payment details on your checkout page, a secure payment gateway encrypts the data and transmits it safely to prevent fraud and cybersecurity compromises.

Next, the payment processor steps in to verify the transaction by checking with the customer’s bank or card network to make sure they have sufficient funds and screen for fraud risks. Upon successful verification, the payment is approved, and the funds are temporarily held in a merchant account before being transferred to the business's bank. Processing online payments comes with a few standard costs, including transaction fees. They often vary based on the provider, card type, and location. Other costs to consider are chargebacks, which occur when customers dispute transactions.

These major components can help you make informed choices about online payments:

• Payment processor: A system that handles the transaction, approving or declining payments.
• Payment gateway: A secure bridge between the customer, payment processor, and the website or app.
• Merchant account: A temporary holding account where funds are stored before being deposited into a business’s bank.

Selecting the best online payment solution for your business depends on various factors like cost, security, and ease of integration. Whether you need a payment processor, merchant account, or payment gateway — here are a few differences:

The common ways to accept online payments are through payment processors, merchant accounts, and payment gateways, often used together. Let’s look at how they impact your business:

• A payment processor handles the entire transaction, communicating with banks to approve or decline payments. It’s the simplest option since it bundles processing, security, and compliance. This is ideal for small and medium-sized businesses (SMBs) that want a quick, hassle-free setup. However, the fees may be higher compared to traditional setups.
• A merchant account is a dedicated bank account where payments are held before being transferred to your business account. Businesses with high transaction volumes often prefer this as it offers lower fees and faster payouts. However, setting up a merchant account requires an approval process and a separate payment gateway for online transactions.
• A payment gateway securely transmits payment data between your website, processor, and bank. It's particularly important for custom ecommerce websites that need advanced security and flexibility. However, payment gateways usually require integration with a merchant account.

Consider these three factors: pricing, security, and integration. Look at transaction fees, setup costs, and any hidden charges like monthly fees or chargeback penalties. Make sure the provider offers Payment Card Industry Data Security Standards (PCI DSS) compliance and encryption to protect customer data.

Check how easily the solution integrates with your ecommerce software and order management system (OMS). If your business uses recurring billing or sells internationally, your payment provider should also support subscriptions, multiple currencies, and preferred local payment methods.

There are many providers, each with features suited for different business needs. Based on your transaction volume and customer preferences, you can choose the one that helps you meet your business goals. Some of the most popular ones include:

• Stripe: Developer-friendly with powerful customization options
• PayPal: Seamless and widely accepted by customers worldwide
• Square: Great for SMBs and point-of-sale (POS) integration
• Adyen: Ideal for enterprises that need global payment solutions
• GoCardless: Specializes in direct debit payments
• Pay.com: A simple and quick option for startups and growing businesses

Once you’ve chosen a payment provider, setting up online payments is a straightforward process. Most platforms guide you through registration and integration, but it’s still important to get each step right to provide a seamless experience for your customers.

Sign up with your chosen payment processor by providing business details, verifying your identity, and linking a bank account. Approval times vary — some providers offer instant setup, while others may take a few days for verification.

Next, connect your payment system to your ecommerce website, digital storefront, or shopping cart software. Many platforms offer plug-and-play integrations, while custom-built sites may require API integration for more flexibility.

Customize your ecommerce checkout to get the best payment experience. Allow customers to use multiple payment methods (credit cards, digital wallets, bank transfers) and make sure features like guest checkout, one-click checkout, and auto-fill are available to reduce friction.

Secure payment tokenization can add an extra layer of protection to transactions and reduce the risk of breaches. Once your setup is complete, test transactions to make sure the checkout process is both smooth and secure. Implement security and compliance measures like:

• PCI DSS compliance
• SSL encryption
• Fraud detection tools
• Two-factor authentication

Customers across different geographies and age demographics prefer certain types of online payment. When you’re offering multiple payment methods, it can help improve conversions and customer satisfaction. While a few customers prefer paying through credit cards, others prefer loyalty points. So providing a mix of options helps you reach a wider audience.

Credit and debit cards remain the most widely used online payment method, accounting for most ecommerce transactions worldwide. In fact, a whopping 76% of customers prefer to pay using credit cards. The reasons are simple: instant processing, strong fraud protection, and broad customer familiarity. When you accept major providers such as Visa, Mastercard, American Express, and Discover, you can serve a global audience with ease. Plus, well-known providers help build customer trust.

Services like Apple Pay, Google Pay, and PayPal store customer payment details securely, which allows for fast, one-click transactions. Digital wallets not only speed up checkout but also increase security by reducing the need to manually enter payment details.

For businesses that handle large transactions or recurring payments, bank transfers and direct debits provide a secure and cost-effective alternative. In the U.S., ACH transfers are widely used, while Europe relies on SEPA payments. Direct debit is especially useful for subscription-based businesses and B2B transactions, where lower fees and reliability are top concerns.

BNPL services allow customers to split payments into installments, often interest-free. Examples include Klarna, Affirm, and Afterpay. This payment method has surged in popularity, particularly for big-ticket purchases, since it enables purchase affordability and conversion rates.

While still niche, cryptocurrency payments (for example Bitcoin, Ethereum, and stablecoins) are gaining traction as a low-fee, borderless payment solution. Crypto transactions eliminate chargebacks and reduce processing fees — and offer enhanced privacy as the payments are verified on the blockchain before the transaction goes through. If you’re not quite familiar with this payment technology, consider consulting with your legal team to ensure you meet the crypto regulations in the countries you intend to operate‌ in.

Your checkout process can make or break a great customer experience. Optimizing your checkout should be a crucial part of your ecommerce strategy. The goal? Reduce as much friction as possible and make it easier for customers to go from “Add to Cart” to “Buy Now”.

You can follow these tried-and-tested practices to optimize your checkout page:

• Minimize form fields: Ask only for essential details and use auto-fill to speed up checkout. Customers don’t prefer to give unnecessary information like “company name” as it slows down the process.
• Enable guest checkout: Let customers skip account creation for a faster experience. When customers love shopping from you, they tend to become loyal customers and will eventually create an account. But, first impressions matter.
• Offer multiple payment methods: Accept credit cards, digital wallets, BNPL, and bank transfers to attract a wide range of customers.
• Ensure you’re mobile-ready: Offer one-click checkout and mobile-friendly payment options.
• Display trust signals: Show SSL certificates, fraud protection badges, and clear refund policies on your website or storefront. If you use AI, declare your ethical AI guidelines and how you intend to use customer data.
• Test and improve: Use A/B testing to remove friction and boost conversions. You can also gather post-fulfillment feedback from your customers using survey forms. With a customer relationship management (CRM) tool like Commerce Cloud, you can constantly analyze your customer feedback and preferences to customize the checkout experience.

Providing diverse payment options increases the likelihood of a successful sale. Learn how Commerce Cloud can help you create a memorable checkout experience that meets customer expectations.