Online payments are becoming increasingly prevalent as transactions move towards the digital space. Online payments benefit businesses in many ways, like enhancing customer experience, streamlining operations, and expanding reach.
Setting up and accepting online payments for your business may seem overwhelming, but it is easy and simple. In this article, you’ll learn how to accept online payments seamlessly and securely.
What Is The Safest Way To Receive Money Online?
Accepting payments online requires careful consideration of security issues. There are different methods, and the most secure will vary depending on certain factors. The usual options are a traditional bank wire transfer, an online banking service, credit card payments, or peer-to-peer payment apps.
Understanding Online Payment Methods
Online payments are payments made electronically through the Internet, usually involving four entities: the merchant, the consumer, the acquirer, and the issuing bank. There are many ways to make payments online via websites, banking applications, e-wallet apps, credit cards, debit cards, and more.
Types of Online Payment Methods
Here are the most popular ways for your business to accept or receive online payments.
Credit and debit cards
Credit and debit cards allow cardholders to make purchases online. These are the most common online payment methods and are accepted by most merchants. Credit card payments also usually award points to cardholders.
However, you most likely have to invest in card readers to accept credit cards or debit cards as a payment form.
Digital wallets
With digital wallets, users can conveniently and safely store their payment information and make transactions on the fly. Because they offer seamless checkout solutions, this online payment solution helps decrease shopping cart abandonment and improve conversions. Additionally, you can incorporate loyalty programs into them. However, not everyone has access to digital wallets, which limits their use in some situations.
Bank transfers
Customers can transfer funds from their bank accounts to the business bank account through bank transfers. When making larger and more frequent payments—where cash isn’t the best option—it is usually a good idea to accept payments using this method. For example, companies that offer mortgages and utilities choose this payment method because their clients can make automatic recurring transfers to pay their bills.
However, the problem is that certain banks do place restrictions on the amount of money that can be transferred via this payment form.
Cash on Delivery (COD)
Customers who use the cash-on-delivery (COD) payment method must pay for their goods in full at the time of delivery. Although its name might imply otherwise, some COD transactions accept electronic payments. In cases such as these, it is more appropriate to refer to it as “collect on delivery.”
Because you can do business with customers who do not have credit cards, you get access to a larger pool of potential customers. However, this payment method also comes with some drawbacks. It includes the chance of delivery refusal, shouldering transaction fees, and the delay in getting the funds. It’s also less likely to be useable to businesses that don’t sell deliverable products like those in finance industries.
Mobile payments
Mobile payments let users pay with their mobile devices. Customers can make purchases conveniently with a mobile payment app, which increases your appeal and attracts new clients. Also, using a mobile device to pay can expedite the checkout process and eliminate the need to handle cash, resulting in time savings and increased productivity.
Just remember that setting up a mobile payment system may necessitate a costly investment in new technology.
Buy Now, Pay Later
Buy now, pay later is a payment plan that enables clients to make upfront purchases of goods or services and postpone payment, usually with interest or additional fees. As a result, customers who might otherwise be hesitant or decide not to make any purchases at all are encouraged to make higher-value purchases.
While receiving online payment this way can instantly increase sales, it could also result in debt from customers and possible payment defaults.
Cryptocurrency
Digital currency, such as Bitcoin, is used in cryptocurrency to conduct online transactions. Because cryptocurrency transactions don’t require third-party verification, they are typically regarded as being more secure than credit and debit card transactions.
The main problem for companies that accept payment online with cryptocurrency is that its user base is smaller than that of traditional currency. So, it may not be as viable for those with niche businesses with local reach, like locksmiths. Furthermore, the irreversible nature of cryptocurrency transactions poses a potential risk when issues like disputes arise.
Prepaid cards
A customer can use prepaid cards, a type of debit card loaded with a predetermined amount of money, to make payments for purchases made online. Prepaid cards are not linked to a bank account, which opens you up to more customers.
However, since some prepaid cards come with many fees, they might not be the best option as a primary means of accepting online payments. It’s also not as widely available as other payment forms, especially for service-based businesses like dental clinics. Consider this as an additional option instead.
6 Benefits of Online Payment Platforms
If you’re on the fence about implementing options to process payments online, consider the following benefits:
Faster payments and improved cash flow
Better cash flow is one of the biggest advantages of adopting an online payment system. Faster fund turnover helps businesses plan ahead and allocate resources more effectively.
Convenience
Customers can buy online from anywhere at any time of day with just a few checkout steps. You don’t have to worry about whether your clients have enough cash on them or whether there are enough coins for change. It’s also perfect for recurring payments like in real estate.
Automatic payment matching
Most online payment processing solutions provide automatic payment matching. It means the solution will record any payment made by customers and update the books without your active involvement.
Security
Generally, electronic payments are far safer and more efficient than their traditional counterparts. They have multiple layers of online payment security features, such as encryption, SSL, data compliance standards, tokenization, and more.
Flexibility
With online payment processing, you can provide a wide range of payment options to your customers. Consumers have preferences, so giving them more choices increases the likelihood that they will follow through on the transaction.
Boost your sales
Having an online payment option lets your business keep up with the trends, which helps attract more customers. Also, fewer carts are abandoned due to the lack of compatible payment processors, which will help boost your bottom line.
How to Set Up an Online Payment System
A merchant account, a payment processor, and a payment gateway are usually required to set up basic online payment processing for your company. Here are the steps to do them.
Choosing a Payment Gateway
Find a reliable payment processor that meets your company’s needs by doing some research. Costs, security features, integration possibilities, support for multiple currencies, and customer service are all critical factors to consider. The industry you’re in also plays a vital role in this process. For instance, support for automated recurring payments is necessary if you’re looking for an insurance payment solution.
Integrating Payment Processors
Choose the integration method for online payments on your website. You can incorporate the payment gateway into your website, for example. Another option is to use an e-commerce platform that has built-in payment processing.
Ensuring Security Measures
Make sure the programming security and compliance issues related with online payment processing are handled correctly by consulting a professional. You can also purchase cyber liability insurance to help with the expenses associated with compromised securities.
Optimizing the Checkout Experience
Checkout experience is important in determining if your customers will push through with the transaction. Below are some tips to optimize it.
Streamlining the Checkout Process
Make your checkout process as convenient as possible without compromising security. Shorten the steps by removing unnecessary form fields, using auto-complete, allowing guest checkout, and more. Also, don’t surprise your customers with additional costs that will only appear at the end of the checkout process.
Implementing Mobile-Friendly Options
The design of any e-commerce checkout page should accommodate mobile devices. Ensure your checkout page is responsive, fast, and has finger-friendly buttons.
Offering Multiple Payment Options
When possible, customers like to use their preferred method of payment. They might abandon the cart when they don’t find the payment method they often use. Make sure to offer as many ways to collect payments online.
How to Make Your Online Payment Platform Secure
Aside from getting a payment processor with solid bank-grade security features, here are some ways to make your online payment platform more secure.
Fraud Prevention Techniques
Monitor financial activities to find early indicators of fraud, like unusually large purchases or unreasonably fast back-to-back transactions. Additionally, you can use two-factor authentication, or 2FA, to verify that your clients are who they say they are.
Chargeback Management Strategies
Forming a chargeback management team can be an investment that pays off in the long run. The team will oversee the use of fraud data to mitigate risk for your company and verify the legitimacy of the customer’s claim.
Compliance with Regulations
Ensure that you understand and abide by the privacy and data security requirements set forth by organizations, governing bodies, and regulatory agencies. The Payment Card Industry Data Security Standards, or PCI DSS, are the most well-known. You’ll benefit from increased security and keep on conducting business in the areas in which you are active.
Get Paid Faster with Podium
Use Podium Payments to streamline the payment process for both you and your clients. With this user-friendly secure solution, you can accept all popular payment methods, including subscription, financing, and buy now, pay later.
Podium Payments also helps centralize customer data, produce high-quality leads, and collect more reviews. It also integrates with popular financial accounts like QuickBooks Online.
Contact us today and find out how to get paid on the platform where you already communicate.
