How to Accept Credit Card Payments Online

How to Accept Credit Card Payments Online

The ‘cash is king’ reign is dead. We are now in the cashless generation, and today, seven out of ten consumers do not have liquid cash on them. It is no wonder most consumers now expect every business to accept credit and debit cards.

Therefore, accepting online payments not only boosts your sales but is also a way of offering your customers excellent customer service. Thus, for the sake of your business, accepting online payments is inevitable. This article will look at ways to get you started with accepting credit card payments from your customers.

The Basics of Online Credit Payment Processing.

According to the U.S. Census Bureau, e-commerce made up 16.5% of all retail sales in the US in the second quarter of 2020. This number is steadily rising, and it is expected to continue growing for the rest of this decade.

The era of walking down the street window-shopping is now long gone. Consumers now prefer to place orders online at the comfort of their living room or office. This need has especially been fueled by the 2020 Pandemic and the need to isolate and social distance. Forcing many consumers to purchase most of their necessities online.

To make a purchase online, there is a basic process that a customer needs to follow. Here is a breakdown of the process to help you understand what it takes to complete an online purchase.

  • A business transaction is initiated when the customer clicks ‘buy’ and inputs their card details into the payment gateway. The gateways will then automatically encrypt this data to protect the customer information.
  • The data is then be transmitted to the payment processor – this is a merchant account with a merchant bank or a third party e-payment processing aggregates, like PayPal or Square.
  • The processor then sends a notification to the customer’s card-issuing bank to authorize the payment. Note that the payment can be denied for various reasons.
  • Once authorized, the customer’s bank then sends the payment to the processor, who then deposits the money to your account.

This is the standard method of processing an online credit card payment. However, you can also accept credit card payments from a new website without a merchant account by a direct gateway. For example, some e-commerce platform like Shopify provides in-built gateways for credit card processing through an admin interface.

How to Accept Credit Cards Payments Online

To accept online credit card payments, you need to have a way to collect and process the customer data. Below are some of the best options for online payment processing.

Through an Official Business Website

In the current market, a business website is a basic necessity – however, you can choose to trade without one. To accept credit card payments on an existing website, you can implement payment buttons using plugins or extensions to allow e-commerce payment or integrate a third hosted page to transfer the customer to third-party checkout options.

To add a payment button to a website, you will need to have a payment processor that supports page payment buttons. Shopify is one example of a payment processor that offers this kind of service. Their Shopify Lite plan also includes Shopify’s mPOS app and an active link to Facebook.

Also, if you have an existing website in site-builders like WordPress, Wix, or Weebly, it’s pretty straightforward to implement online payments. These sites have in-built third-party extensions and plugins that will automate the process with only a few clicks. You do not need special skills to get these apps ready to accept online credit payments.

A Hosted Payment Page

The other option is to use a hosted payment page on your existing website. This is a page feature that automatically redirects the customer to a secure checkout page hosted by the payment processor once they click the ‘pay’ button. For example, if your processor is Paymentcloud, the button will send your customers to Paymentclouds’s website to check out.

Hosted pages are easy to integrate into your existing website. You will only need to receive a formatted code from the processor that you will then paste and format on your website.

This method is very efficient as it redirects the monetary hassle from your site and eliminates all the risks associated with online payments – transferring this risk to the third party.

Using a New Site With Shopping Cart Software

Of all the other options, the shopping cart websites(also known as shopping cart software) are the most convenient option. These sites offer you all-in-one online sales solutions to make your selling process much more efficient.

Shopping carts also allow you to manage sales and centralize market control from multiple channels. You can sell on social media, on sites like eBay and Amazon, and any other retail channel and handle all the processing through a single platform.

Some shopping cart software also offers integration to marketing platforms and point of sale (POS) systems. You will get anything you need by searching the app for available extensions and apps.

You can also add a shopping cart to an existing website. However, you will still need to choose a platform, purchase a domain, and pay for hosting.

How Much Does It Cost to Accept Credit Card Payments Online?

There are charges incurred when a customer pays you through a credit card. The amount varies depending on the pricing method you chose. There are three primary pricing models available for online payment.

Flat-rate Pricing

The flat-rate model includes fixed rates for various types of transactions. For example, Paypal charges a flat charge of 2.9% plus 30 cents for all online transactions. There are no additional fees charged for the flat-rate model. Also, there are no lengthy contracts needed as there is already preset terms and conditions.

Interchange-plus Pricing

For this model, the primary price determinant is the interchange rate paid by all the credit card processors (plus the processor’s fees). People consider this method the most transparent as it is based on the universal rates.

In this model, the processor’s fees in negotiated as a percentage plus s per-transaction charge. For example, your negotiated processor fee can be 0.35% plus 10 cents. However, remember that this does not include the interchange rate.

Tiered Pricing

This method differentiates transactions as qualified, mid-qualified, and non-qualified transaction types. The qualified type is transactions that are physically swiped at a terminal. Mid-qualified transactions include reward cards that are physically swiped, and non-qualified type is transactions card-not-present transaction(e.g., when you key in and accept payment from a customer over the phone).

The charges are based on the risk associated with the transactions. Therefore, non-qualified is charged more expensive than mid-qualified, which is then set more than qualified.

Remember that these charges vary from one processor to the other. Hence, it is essential to request a breakdown of all the charges and review them before signing an agreement to ensure that you are informed of all the costs that you will incur.


Accepting debit and credit payments online will increase your sales and improve your cash flow while offering a much-needed service to your customers. Therefore, it is vital as a business owner to find the best way to incorporate this into your business.

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