How to Take Payments Online
Updated: Feb 21
Taking payments online can be a vital part of running your business, if you are unable to operate from your premises.
You may now be wondering how to take payments online and which online payment gateway is best for your business?
Read our guide to summarise a few of the best online payment solutions for small businesses, as well as how to get them up and running.
What Are My Payment Options?
The first step to understand your payment options is to learn about the various payment methods, that are on offer.
1. Bank Transfers
When money is sent directly from one bank account to another, then this is a bank transfer. This method tends to be a quick and free solution, but some customers may not feel comfortable sending money this way.
2. Direct Debits
A direct debit can be a great option if recurring payments are due. For example, this could be for a subscription service. Once authorised, you can collect varying amounts from customers’ accounts – but only if you have provided them with advance notice of the amounts and dates of collection.
3. Card Payments
If your company sells one-off products or services, then taking payments through an online payment system is most likely your best solution.
If you already have a website, then you will be able to integrate the payment system into the site itself. If you don’t a website, then many services will provide you with a link or invoice, which can then be sent over to your customers.
What Is an Online Payment System?
An online payment system is usually comprised of a few different elements, including:
· Payment gateway: a secure gateway that sends online payments to the payment processor
· Payment processor: this deals with the actual transaction between payment cards and the acquiring banks
· Merchant bank: the funds are deposited into a merchant bank before going into your business bank account
Some online payment systems will already come with all these elements, which will mean you can start taking payments right away.
If you opt to use an online payment system which isn’t an all-in-one solution, chances are they will still be able to offer the support you need to get set up quickly.
Which Online Payment Solution Should I Use?
Now you know what an online payment solution is, the next step is to choose which one to use.
Deciding on the right online payment solution will be dependent on your specific needs. We have put together a list of some of our favourites, to help you make that decision.
Most people will have heard of PayPal, as it is one of the world’s best-known online payment systems. They offer a payment option for small businesses called Checkout. Using this, customers can choose from a variety of payment methods, without leaving your site.
There are no set-up fees or monthly payments with PayPal, but you will be charged per transaction. These fees are currently set at 2.9% plus 30p per transaction.
One of the best perks about PayPal is that you won’t need to worry about PCI compliance. As the payment is handled for you, all you will need to do is complete a self-assessment questionnaire.
Worldpay is meant to be the UK’s largest payment provider.
Worldpay can be integrated directly into your website, which means you can begin taking payments within 24 hours. The price is also very reasonable at £19 per month and there are no set-up fees.
But, there's more!
Worldpay also offers a Pay by Link feature, which allows you to send a secure payment link to your customers via email. This means you can still take payments online without having a website or an online shopping cart.
For those that don’t have a PCI-DSS compliance certificate, Worldpay has a SaferPayments PCI service, which you can use.
Shopify is the most popular eCommerce platform in the UK. They will provide everything you need to start running your online business. It’s a brilliant platform, as you don’t need a website to get started with selling your products.
Their package includes web hosting and payment processing, along with the ability to integrate other sales channels, like Amazon.
Shopify would be an excellent option to give a go, because they offer a free, 14-day trial, with no credit card required. After this, fees start from $29 per month (about £22) or 2.2% + 20p per transaction if you pay as you go.
Stripe has gained a lot of popularity in recent times, becoming one of the most in-demand online payment systems. This popularity is due to the company’s transparent pricing structure and easy integration process.
And there's even more!
Aside from card payments, they also offer recurring billing and direct debit services.
You can get started with no set-up or monthly fees. They charge per transaction, with fees starting at 1.4% plus 20p.
It’s necessary to have your own website and shopping cart software to use Stripe, so it may not be the best option for everyone. It will also require some technical knowledge, in order to get everything up and running (although they do offer some helpful, easy guides).
Klarna is growing incredibly fast and is changing the way customers play online.
Not only can customers easily ‘Pay now’, but there is also the choice for a delayed payment option with 0% interest.
Customers can choose to ‘Pay later’, which enables them to pay at a later date. Finally, there is also the possibility to ‘Slice it’, which means payments can be split and paid over time.
Klarna also operates on a pay-per-transaction model, with fees ranging from 1.99% to 2.48% - depending on the size of your business.
So, hopefully having read this guide, you will now know what online payments are, how they work, and how to get started!
The next step is to further research the various payment solutions and choose the very best match for your company.
We wish you the very best of luck with taking online payments!