New start-ups always seem exciting. Opening your ecommerce store and sourcing your products enhances the view of your website but the most crucial step in your business is – how to get paid?
Every online business has ecommerce payment processing solutions, and you need to understand this for your new start-up.
In this blog, you will get the complete concept of an ecommerce payment gateway and how it processes while making payments. We’ll also share a few examples of ecommerce payment solutions.
So, without a further delay let’s start with a short introduction to the online payment methods
What Are The Different Online Payment Methods?
Before learning how payment processing works, let’s take a look at multiple payment methods that customers commonly prefer to use:
- Credit Cards: It is the most popular way to pay online and offline and it imposes a liability on the buyer side. A credit card is a plastic card issued by banks to perform cashless payments as it follows the strategy of buying now and paying later for the goods and services purchased.
- Debit Cards: It is equivalent to paying in cash or check and with no liability in central. It is a payment card that directly deducts the money from your account when it is used. These cards let you get cash quickly from the ATM.
- Alternative Payment Methods: It includes wallets like GooglePay, AmazonPay, PayPal, ApplePay, etc. They allow you to pay for goods or services which are not made via cash.
- Digital Currency: Used by a smaller number of people, it includes payment with Bitcoin. These currencies are only accessible to us in digital form as they do not exist in real form.
Now, knowing the payment methods, we should move on to see how the ecommerce payment processing works.
Different Elements of Ecommerce Payment Processing
- Payment Gateways: In this, the customers enter their payment information. It is a technology used by the merchants to accept credit or debit card purchases from their customers.
- Payment Processors: It extracts information from the gateway and verifies the funds of the customer’s accounts. It facilitates communication between the customer’s bank and the seller’s bank.
- Merchant Accounts: It receives funds after the whole process. It is a type of business bank account that allows a business to accept electronic payment transactions.
Let’s see how these three work together.
Steps Involved In The Working Of Ecommerce Payment Processors, Gateways And Merchant Accounts
Step 1: Customer enters the card information at the checkout.
Step 2: The payment gateway safely stores the data and sends it to the payment processor.
Step 3: The payment processor ensures that the customer has the funds to cover the purchase.
Step 4: Issued the customer’s credit card either accepts or rejects the payment request.
Step 5: The payment processor then sends the result to the payment gateway solutions.
Step 6: If the transaction gets approved, the payment processor issues the funds to the merchant account or the merchant’s bank.
Examples Of Ecommerce Payment Solutions
Let’s discuss some examples of payment methods.
AmazonPay is a service that you can use as a payment mode. It is associated with your Amazon account that lets you pay for goods and services. Moreover, it simplifies checkouts for millions of Amazon customers, and gives increased conversions, reduced cart abandonment and faster checkouts. It also provides fraud detection technology and enables users to use payment and shipping information stored in their Amazon accounts.
BlueSnap is a single global payments company that accepts payments from anywhere and on any device. It offers global ecommerce payment processing solutions and multi-currency support. Over 100 currencies can be selected from 16 different payout currencies in just one account. It also provides high security and detailed analytics to the user.
It is a fast, easy and secure payment acceptance. Stripe is a payment service provider that works with Google Pay, Apple Pay, and Masterpass by offering more payment options to their customers. Stripe is PCI certified, enabling it to accept payments from customers worldwide.
Square allows you to sell online and in-person and provides tools to help you grow your business and improve your operations. The services include payroll and time management, employee-specific access management, customer engagement, and online invoices.
PayPal allows individuals and businesses to securely transfer funds and charges a small fee for handling payment processing. It is a powerful technology that readily accepts credit card and debit card payments, and it enables payment through Facebook, Pinterest, and Instagram.
By now, you must have understood the available options to accept payments through your ecommerce platform, but it is upto you to choose the best choice for your ecommerce business ideas.
Payments are a crucial part of your success; it doesn’t matter whether you have just started out or fully established a business.
You have plenty of options to choose from, but you need a payment processor to address your needs. Just make sure that whatever processing solution you choose must enable online transactions for the convenience of your customers.