The e-commerce sector is bigger than it has ever been and is growing.
As users buy more online, competition becomes fiercer, and so for millions of e-commerce businesses, optimising their operations at all levels is the key to long-term growth and success.
One of the key operational considerations for e-commerce businesses is how to accept payments online, and how to do so as effectively as possible.
Payment processing is a system with several different steps, including authorisation, capturing, settlement, and reconciliation. The process includes the handling, facilitation and notification of all financial transactions between a buyer and seller online or when paying by card, so it’s vital for businesses of all sizes to understand the way it works.
In this guide, the team at Acquired.com are offering our insight on how to accept payments online, the importance of a strong payments strategy and how different payment types work. To find out more, keep reading or get in touch with our in-house payments experts!
How do you accept payments online?
In order to accept payments online, an organisation will need to work with (or have their own) payment gateway and merchant account. While single businesses can technically build their own payment gateways, for most companies the cost of creating, accrediting, and maintaining this gateway is prohibitively expensive.
That’s where companies like Acquired.com come in. We help businesses connect their bank accounts to their POS, and act as the go-between for all stages of the payment process, passing messages from customers to businesses to card schemes (Visa, Mastercard, American Express etc.) to banks, and back again.
How does payment processing work?
Payment processing for credit and debit card payments happens almost instantly with the help of online payment services like Acquired.com, though the process actually covers several different steps and goes through multiple parties.
First, merchants have to process the payment card – for online transactions, users enter their card details directly or use a mobile wallet like Apple Pay or Google Pay.
Then those details are passed on to the card acquirer via the payment gateway. The details are checked and sent through each party in the process. The card acquirer will facilitate communications between merchants, banks, and card schemes. This process ensures that the right accounts will send and receive the funds, and for the correct amount.
Once the bank has all the information required about the card (and therefore the account) to charge, it will authorise or decline the payment. Transactions online can be declined if the customer doesn’t have the appropriate funds in their account, or if there is a lack of authentication and the standard checks by business banks flag that the transaction may be fraudulent or needs additional authentication.
If the transaction is approved, the business is notified, the instruction for money to leave the account goes ahead and the transaction is processed. The amount of time the bank transfers of funds take, and the transaction fees that are charged, will be dependent on the agreement the business has with its acquirer!
Benefits of accepting payments online
Effective payment processing can help businesses increase sales by making it easier for customers to make purchases, while also improving cash flow and reducing chargebacks. An effective payment process can also improve business decisions, customer data security and marketing strategies by offering complete, valuable, and in-depth data about how payments are made and received.
Ultimately for e-commerce businesses, accepting payments online is essential to their operations and success – without it, they have no way to accept funds from customers in a way that is scalable and sustainable as the business grows.
In today’s market, brick-and-mortar businesses can also benefit from accepting online payments and moving into the ecommerce space. As traditional high-street shopping continues to struggle, e-commerce offers businesses opportunities to expand their customer base and offer a range of convenient payment options.
It’s not just e-commerce that can benefit from accepting payments online. Service-based businesses can use online payment solutions to streamline invoicing and billing processes, as well as offer recurring payments or instalment plans for their customers.
Types of Payments
In today’s world, when customers get to their shopping cart online, they want a payment experience that is quick, smooth, and offers multiple payment method options.
The payment process for all digital payments is largely the same – every payment has to go through authentication, authorisation, and reconciliation steps. However, there are some unique considerations for alternative payment methods that businesses should be aware of when accepting payments online.
Debit Card and Credit Card Payments
When a business is looking to start accepting payments online, the vast majority of the time they’ll start with credit card and debit card payments. The card networks will be responsible for sending the transaction to the right bank to get approval or to decline the payment. They also ensure that the transaction meets SCA guidelines and fraud prevention standards!
Major credit cards and debit card networks generally charge processing fees for their part in the payment process, which is then split between the other parties in the process (this will usually come off the transaction amount as a small percentage).
Recurring payments do exactly what they say on the tin! There are a couple of options available to businesses that take recurring payments (such as subscriptions, utilities, season passes, regular charitable donations etc.). The most common ways to take recurring payments are via direct debit or through credit and debit cards with payment details saved and stored securely, which are then charged on a regular basis.
Direct Debits usually move through Faster Payments, which means they arrive quickly, and are generally the more popular option, as they give both businesses and users more control over customer payments.
For businesses that rely on subscription-based products and services, being able to take recurring payments is vital to their business. At Acquired.com, we work with many businesses taking payments on a recurring basis to improve their completion rates, reduce chargebacks and ensure their customer data is safe and secure at all times.
Mobile Payment Apps & Digital Wallet Services
In recent years, mobile payment apps and digital services have taken up a big chunk of contactless payments and physical card payments. Digital wallet payments essentially save a copy of a credit or debit card to your mobile device (including phones, tablets and smartwatches like Apple Watch), and then can be used the same way a normal card would.
Once customers have been through the setup process, digital wallets allow for a smoother user experience at checkout. Instead of having to fetch or save their card details in a browser, the mobile wallet automatically inputs this data and provides additional authentication while it does so. From there, the business processes are exactly the same as they would be when paying with a physical card.
Setting Up an Online Payment System
Choosing a partner for your business’s payment processing can be a daunting prospect. Processing payments quickly and efficiently is so important to your customers and to your bottom line, and you don’t want to make more financial admin for yourself!
These are just some of the considerations you should be taking into account when choosing a payment processing partner:
- Supported payment methods – Do they support all of the payment methods your customers want to use?
- Security – Do they have a strong understanding of payment security measures such as PCI & SCA? What measures do they have in place to protect customer data?
- Fees – Payment processors typically charge a per-transaction fee. At Acquired.com, we offer an entirely consultative approach to make sure our clients are not paying additional costs for services they don’t need while covering everything they do need.
- Website integration – What is the integration process with your e-commerce platform or website like, and can you expect a smooth transition?
- Customer support – Is there expert, helpful customer support available? Do you have a singular point of contact? Is customer support proactive or reactive?
How Acquired.com can help
At Acquired.com, we have extensive experience in the online payments sphere. Our team are experts at what they do, and with us, you can expect a wide range of support and payment processing functionalities. To learn more, or to better understand your payment processing needs, please don’t hesitate to get in touch!