How to Set up an Ecommerce Payment Process

Interested in setting up ecommerce payment processing for your business? Learn more about ecommerce payment processing from Swipesum.

An ecommerce business simply can’t be successful without an effective, stable, and secure ecommerce payment process. That’s true even if every other business function and workflow offers positive results.

An online store can only capture revenue if it has all of the needed payment processing services in place. That’s an achievable goal, but the process of setting up and managing those tools and processes can be complex. And most business owners don’t have especially deep backgrounds in payment gateways or payment processing for specific ecommerce platforms.

This guide can help you build a better understanding of key parts of the ecommerce payment processing workflow. We’ll define common terms, describe the standard payment processing workflow, and share some advice to make payment processing more effective for your business. Click here to book your free consultation today!

The Basics: Key Terms and Definitions in Ecommerce Payment Processing

When your customers move through the checkout process at your ecommerce store, you want them to have a secure, easy, and intuitive experience.

Behind the scenes, there are three key components that lead to this experience. Every ecommerce payment processing workflow incorporates the following:

1. Payment Gateway

A payment gateway is a bridge between your website, where your customer enters payment details (such as credit card information), and the relevant payment processor. You may also hear it called an ecommerce payment gateway.

The function of the gateway is relatively simple but is crucial to the payment process. It keeps sensitive information used to make an online payment safe as that data is transmitted. That’s especially important for protecting your customers and building positive relationships with them.

2. Payment Processor

Ecommerce payment processors retrieve information from your payment gateway. Then, they determine if the details are accurate and if enough funds are available. Finally, payment processes manage the transaction between the customer’s source of funds (like a bank account or credit card company) and your merchant account.

Payment processors play a key role in delivering payments to your business and in handling sensitive information. In an ideal world, a payment processor would have a few key attributes:

  • Excellent security and compliance: Payment processors need to align with the Payment Card Industry Data Security Standard (PCI DSS, or just PCI). If a processor can’t prove they’re PCI compliant, you shouldn’t work with them. If you have any interest in recurring payments or saving customer payment information, make sure the processor can tokenize and secure customer payment info as well.
  • Accept payment methods relevant to your customers: A secure and dependable payment processor isn’t very useful if it can’t accept the payment types favored by your customers. Make sure there’s alignment between how your customers like to pay and the types of payments processed.
  • Reasonable and clear fees: Payment processors tend to charge transaction fees that include a percentage of each sale and a fixed amount. Some also charged fixed fees. Make sure you understand the costs involved and when they’re incurred.

A successful transaction results in a deposit into your merchant account — the final foundational component of ecommerce payment processing.

3. Merchant Account

A merchant account is similar to many other common types of bank accounts. Once a transaction is processed, the processor moves those funds to your merchant account. After the transaction is fully complete, the funds then move from your merchant account into your normal business bank account.

Merchant accounts are required to process debit and credit card transactions, as Investopedia explains. They’re generally unavoidable for ecommerce merchants, as credit and debit cards are among the most common types of payments online.

An ecommerce entrepreneur receives a payment notification on her phone as she stands in a workroom.

Finding Ecommerce Payment Processing That Works for Your Business

Your business will almost certainly choose an ecommerce platform to make operating an online business easier and more manageable. Shopify, Woocommerce, and Webflow are just a few examples. These platforms provide wide-ranging benefits but have key differences between them, as well.

We don’t want to tell you which ecommerce platform is best overall. That can vary from one business to the next for a wide variety of reasons, and we want to stay focused on payments.

When it comes to your ecommerce payment system specifically, we’re happy to offer this advice. Evaluate all of the payment integrations available to your business after choosing an ecommerce platform. Ideally, you’ll have the opportunity to integrate with a payment gateway.

This integration allows you to change between merchant services providers as needed without losing retained customer card data. That flexibility will come at a cost, but we believe it’s well worth the investment.

Deciding what works for your business in a broader sense — the merchant services providers you work with, ensuring common customer payment methods are accepted, and more — is a much more individualized issue. The needs of a SaaS business, for example, can be significantly different than that of a consumer goods retailer.

However, there are clear paths toward creating an effective ecommerce payments solution for your business.

The Value of Independent Payments Consultants

If you’re starting an ecommerce business, you probably have a strong background in your field. And you’re using that knowledge and experience to do everything from source and develop products to effectively marketing to your intended customers.

What you may not have is deep knowledge and experience within the world of ecommerce payment processing. Unless you’ve operated a store in the past or happened to work in this field, you may have no experience beyond filling up a shopping cart and checking out as a customer.

That’s completely understandable. It’s why our team of independent payments consultants has come together: Using our collective knowledge and experience to deliver effective, provider-agnostic solutions to our clients.

We can help you with everything involved in establishing an ecommerce payment process. That stretches from the initial evaluation of vendors to the contract negotiations that help your business reduce the fees tied to each and every transaction.

Want to learn more about the many benefits of having an independent payments consultant on your side? Book Your Free Consultation!

Michael Seaman

Michael is the co-founder and CEO of Swipesum. A veteran of the payments industry, Michael and his brother Stephen have led Swipesum since its inception in 2016. In his free time, Michael likes to play with his two daughters and skateboard.

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