Having the ability to take payments online can be transformative for a business. By opening up your shop floor online, you can take advantage of a significant rise in the number of potential customers who can buy from you. If you already run a brick and mortar store, now could be the time to open up online.
There’s a lot that goes into the creation and management of an online store – but arguably the most important thing to get right is your payment system. Let’s take a look at how to maximise your chances of success, by making sure you get the basics of taking online payments right from day one.
Is it time to move my business online?
Not every business finds a natural home online, even in today’s technology-focused world. In order to work out if your company would be the right fit for an ecommerce website, there are a number of factors you must first consider:
- Customer expectations. It’s hard to know exactly what your customers are thinking. But if you’ve noticed you’re getting asked more questions about online transactions than in the past, it might be time to make the switch. One of the best ways to find out what your customers want is by simply asking them. This could be via a promotional survey (where they get a discount for filling it in), or as a question that can be asked in person as they go through your checkout.
- What competitors are doing. One of the best ways to gauge interest in an online marketplace is to see what current names in the industry are doing – in other words, your competitors. If you’ve spotted that most of them offer online payments as standard, it might be time to follow suit. Nobody wants to get left behind.
- An outdated website. It might be the case that you already have a website, but it is out of date and was not designed with payments in mind. Perhaps you’re delaying an update in anticipation of a rebrand, or have completely changed your marketing approach (for example swapping from selling a service to a specific product). Whatever the circumstances, it’s important you get your online store up and running if you want to benefit from offering a facility for customers to pay online.
- No existing website. In some instances, it’ll be a case of starting completely from scratch. The demand is out there, but you don’t have a platform to exploit it. If you’re confused about how to set up your current site to take online payments, be sure to do some research. While you may have felt out of your depth in the past, the introduction of payment gateways and payment service providers (PSPs) has made it easier than ever before to set up online and start taking payments.
Different ways to accept payment online
Just as with face-to-face transactions, accepting online payments can take a number of forms. While there are a lot to choose from, most websites will most commonly use on ofthe following:
- Firstly, create a merchant account. This is a pretty big step for anyone looking to expand their business. A merchant account is a bank account that allows you to take digital payments from your customers.
When a payment is made, your merchant account holds the funds until it’s been verified by the buyer’s own bank. At this point, the funds transfer from your merchant account to your business bank account. Without this, you won’t be able to process transactions from credit or debit cards. Additionally, your merchant account provider may be able to assist with setting up an ecommerce store.
- Using a payment gateway. A payment gateway (such as PayPal) connects your website to a checkout system. In some instances, this involves embedding a checkout on your website. In others, customers will be redirected to the payment gateway’s own site to finish their purchase.
- Allow mobile wallet payments. Mobile payments saw a 75% rise between the end of 2019 and 2020 in the UK alone. As an online store owner, you decide whether you want to accept payments made from a mobile app (also called a mobile wallet) or not. But with the popularity of mobile payments increasing, it would be risky for any merchant to deny this kind of transaction.
- Use recurring billing or invoicing software. Some ecommerce platforms make it possible to send recurring monthly or bi-weekly bills to customers (for goods they have used) and invoices (for goods they are in the process of paying off). This works well with subscriptions, as well as larger payments which a customer might want to break down into instalments, for example where a large deposit is required.
Choosing a payment service provider
While some companies like to keep their money management in house, it’s becoming increasingly common for ecommerce stores to turn to third-party payment services. These payment service providers (PSP’s) work to keep your business financially operational, providing services like:
- Facilitating the interaction of payment gateways
- Transferring financial information between a gateway and a merchant account
- Processing multiple currencies for cross-border payments
- Offering high security standards to keep money protected
- Providing detailed transaction reports to help you keep on top of transactions
- Ensuring all transactions are fully and accurately processed
But how do you know which PSP is right for you? Some of the key factors to consider when making this decision include:
- Technical requirements. It’s important to find a PSP that offers both versatility and comprehensive technical service. While a new website owner won’t need to worry about marrying up existing software with a business process, factors like API connections (for future updates), redirects (to take a customer from your site to the PSP’s after checkout), and iFrame connections (which help any screen adapt to the layout of your checkout) are all a must.
You’ll also have the choice to use direct or hosted integration to process payments. If you aren’t sure which to opt for, be sure to assess the benefits of both.
- Security features. It’s important a merchant conforms to the Payment Card Industry Data Security Standard (PCI DSS), and a PSP can support you in doing this for a small fee. This guarantees sensitive customer information is protected from theft and fraud, as well as saving you the hassle of trying to attain this level of certification yourself.
- Additional services. As well as the bread-and-butter services we’ve covered, there are more personal features which will vary from provider to provider. Some of the more common ones include things like:
- The ability to manage recurring payments
- A dedicated customer support network to reach out to
- Risk protection against missing payments
- Strategy data based on payment behaviour of a target group
- Contracts and pricing. Just as with any service, prices will vary. When it comes to the costs of a PSP, business owners can expect a one-time setup fee, monthly service cost, and a number of other variable charges. These variable fees usually apply to factors such as:
- The number of transactions the store has
- The expected sales revenue
- Currency conversion rates
- Transaction cancellation fees
- Flat fees for each transaction (in the case of small transactions)
Best practices for setting up a payment system online
Just as with any new venture, there are some dos and don’ts when it comes to the best way to set up and manage your payment system. This is particularly true when it comes to the technological side of things.
It’s important to do everything you can to prevent fraud, provide a thorough level of security and adhere to any regulatory standards that are designed to protect businesses and individual customers.
Let’s explore some of the best practices for safely and securely getting started with online payments:
- Choose a reputable provider. Check that your provider has the facility to ‘test’ your online store before you go live. The facility to test will allow you to look closely at the customer experience, check for discrepancies in on-page pricing, and test discount and tracking codes in a testing environment.
- Ask users for strong passwords. Cybercriminals will often exploit weaker passwords to gain access to someone’s account. Encourage users to make theirs stronger (usually a random combination of characters), and add a “forgot your password” function in the event that they themselves cannot gain access.
- Use strong customer authentication (SCA). Rather than just relying on a password and username, you can implement systems that encourage a user to provide a second stage of authentication. This could be something like a personal pin code, authenticating a purchase via a notification on their smartphone, or even fingerprint or voice recognition.
- Manage PCI compliance. If a merchant processes and stores the financial information of their customers, they need to be PCI compliant. This means following a strict code of practice that keeps customer data secure. Failure to follow this code can result in fines and even legal proceedings – not to mention the damage it can do to a business’ reputation.
The basics of setting up an ecommerce website
If you’re completely in the dark about setting up a website, it might be tough to know where to start. And while handy resources do exist to help guide you through the process, it doesn’t hurt to know some of the most important factors upfront. Here are some of the key areas to focus on when creating the bare bones of your site:
- Decide on name and branding. If you haven’t already, be sure to register a domain name as early as possible. If your business is new, or you want to use this as a chance to rebrand, make sure to perfect the look and feel before creating your site. It’s much easier to include design elements in the initial build, than to try to squeeze them in where they don’t fit at a later date.
- Obtain a Secure Sockets Layer (SSL) certificate. If you choose not to use a pre-packaged ecommerce service, you will need to get an SSL certificate. This is a must for many reasons, as having one will:
- Create a secure and encrypted connection between the host server and the customer’s browser
- Display trust and reliability in your business in the address bar
- Protect all principle and secondary subdomains
- Prevent the interception and misuse of sensitive personal information
Failure to possess SSL certification will result in some search web browsers (such as Google Chrome) flagging your website as potentially unsafe to visitors.
- Choose the right ecommerce platform. All websites need to sit on some kind of server. Luckily, there are ecommerce platforms which have been specifically created to house a huge variety of online stores. When looking for a platform which matches your needs, keep the following in mind:
- Website speed and load times
- Support for your software
- Shared hosting abilities
- Database scalability
- Access to error log files
- Ease of administration
- Website compliance template
Do some research here, and find out if there are specific platforms that work best for the kind of industry you’re in.
- Look into General Data Protection Regulation (GDPR). This is a must for any new website which stores data in any way. To fully comply with GDPR you’ll need to have:
- An acceptable use policy
- Accessibility features
- A detailed terms and conditions section
To make sure you’re ticking all the right boxes, you might need to reach out to a professional law firm for guidance.
Are you ready to start taking online payments with a brand new ecommerce site?
We partner with e-commerce providers like Big Commerce and Shopit, who are geared up to help you when it comes to building websites from scratch. If you feel like you could do with further support and guidance, be sure to reach out to a member of the RMS team.
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