As a subject that is seldom covered in Internet Marketing courses, I felt that a blog post was much needed on how to take payments online – simply because it’s one of THE most essential things that you need to have set up, in order to make any money from your own products or services online.
In fact, you can’t make any money before you get this sorted.
If you want to simply act as an affiliate, then the above sentence isn’t totally true for you.
But if you ever want to sell your own products, then you’re going to need to listen up.
Today, I’ll be sharing with you how to legally, safely and securely take credit and debit card payments through your website.
It’s not as technical as you might expect – yes there are a few things to get your head around, and yes it does take a bit of work, but it’s worth it for the ability to accept payments for your products, via your website.
Let’s take a quick look at how the process works…
Here are the 3 key things that you will need to get set up to take payments online
- Some sort of Merchant Account – this is like a bank account, except that it’s specially designed and managed by the bank for you to take payments for your products as a merchant.
- A Payment Gateway – this is the system that customers will submit their payment details through.
- A Shopping Cart – this will allow your customers to add products to a “basket” before “checking out”.
Take a look at the infographic below to see the process that happens when you take payments online (you can click on the image to zoom in!):
(If you want to post this infographic on your own website, then simply grab the code from the bottom of this post, and insert it into your site)
There are TWO ways that you can obtain the ability to take payments on your website:
- Via an Internet Merchant Account (IMA) and a Payment Service Provider (PSP, also known as a payment gateway).
- Via a Payment-Processing Company (an all-in-one system which includes a payment gateway and merchant facilities – eg. PayPal).
In both of these methods of taking payments online, you need the 3 key things explain above (a merchant account, PSP and shopping cart), and the customer will go through the same process as described above. The difference in these two methods is all in the back-end and how you deliver the service of taking the customers’ payments. The output is exactly the same.
So let’s go through these in a little more depth.
Internet Merchant Accounts (IMAs) and Payment Service Providers (PSPs/Payment Gateways):
In this method, you will need to apply for an IMA and a PSP separately. Some IMA providers have recommended Payment Gateways, and likewise, some Payment Gateways have recommended IMA providers, which means they can be applied for at the same time; but they are completely different systems.
- The formal application process means that you can be sure that once you are accepted, you’ll have a dedicated account manager and good service.
- The payment-processing charges are often fairly reasonable, and slightly cheaper than in method 2.
- The webpages required for the Payment Gateway can be hosted on your own website, meaning that the customer does not have to go elsewhere in order to make the payment.
- They often pay the money that you take online to your normal business bank account fairly quickly.
- The formal application process is also a downside – it can be quite difficult to get accepted in the first place because you are dealing with a bank and they are majorly risk averse. They will want to check you out thoroughly to make sure that you aren’t committing fraud, to the extent that existing businesses sometimes have to submit previous year’s accounts, and new businesses have to submit a business plan!
- They can sometimes withhold money due to you if you have a large influx of sales that is “out of the ordinary” – again, this is to do with the risk averse attitude of the banks, and this can be a problem for internet marketers. When grow your business, and earn 5 or 6 figures in a short period of time during a launch, the banks view this as “out of the ordinary activity”, which means they suspect that you obtained it fraudulently. It’s not always a problem, but it certainly can be.
- It’s a bit more technical that option 2 – because the IMA and Payment Gateway are separate, you will have to get them integrated and talking to each other before payments can be taken. It’s not like you need to know advanced website coding or anything – many IMA and Payment Gateway providers have great support to help you – but it is slightly more technical than option 2.
Important Note: You will be required to conform to various “Compliance Rules”, both on your website and as a business. These vary between different IMA and Payment Gateway providers, so it’s best to look into the compliance guidelines of the provider that you decide to go with to get information on what you will need to comply with.
The application process is quite lengthy, and depending on the merchant bank you decide to go with, it could take up to a week to prepare the application, anywhere between 2 and 4 weeks for the application to be approved, and then you’ve got the time it takes to get the payment gateway set up on your website. So it’s quite a lengthy process, but worth it if you want to be with a proper bank and take payments online.
- Sage Pay – this is a payment gateway that has it’s own IMA and many recommended IMAs that integrate with it. It’s very well established in the e-commerce world, and provides great customer support. It’s got separate live and test servers, allowing you to safely test payments without the risk of the public getting involved. It also has iFrame support, which gives the appearance that the customer has never left your website, and this could increase your conversion rates. There are also extensive payment page customisations that you can make, but it’s a bit long-winded to get your pages updated – you have to submit the changes to Sage Pay, and they have to manually review and approve it before the changes are applied. Reports say that this usually doesn’t take more than 24 hours, but it’s still more long-winded than just clicking “Save” and it’s all ready to go.
- World Pay – like Sage Pay, this is another payment gateway built to support the Merchant Bank “Streamline”. It has different live and test servers (like Sage Pay), and you can easily customise the payment pages with your own business branding, or even host the pages on your own website. From personal experience, their customer service is not as good as Sage Pay, but they can still provide you with what you need with regards to taking payments online.
- Authorize.net – over 400,000 sites currently use this payment gateway, making it one of the largest worldwide. You can accept a wide variety of different credit and debit cards, as well as gift cards, e-Checks, and signature debit cards. Payments back to your business account are often made within days of the transaction, meaning that you can manage the cash-flow in your business much more effectively.
- Fraud Prevention tools – all of the above companies, and the majority of companies really, are hot on fraud prevention tools, because it’s such a rising problem in today’s super-connected world. They vary in how they all work, but fundamentally, they all do the same thing – they try to prevent people from buying products from your website with stolen debit or credit card details.
- Personally we have never used any of these because we decided to go with a payment-processing company. However, from my research, I would recommend Authorize.net or Sage Pay. Authorize.net have won an the “Achievement in Customer Excellence” (ACE) Award for 8 years on the trot (since 2008!), and there must be a reason that 3 major shopping cart services (Volusion, Shopify, Magento) and eBay (for those who don’t know – the largest online auction site in the UK) endorse them. As for Sage Pay, when I was doing research into the different companies, I had a few phone calls with them, and they were very polite and informative, and gave great customer service.
Payment-Processing Companies provide the IMA and PSP all in one system, and you only have to make one application. It’s all integrated and ready to go – you’ve just got to install it in your website.
- The application process is very simple – just one simple application, and they aren’t nearly as risk averse as the banks – it’s a lot easier to get accepted, and they don’t keep such a close watch on fluctuations in your transaction levels as the banks do.
- It’s less technical – as I said, applying for an IMA and PSP separately is not massively technical anyway, but if you want a quick and easy short cut, or you really are petrified by technicalities, then this could be a good alternative for you.
- Depending on the company, you can’t always host the secure payment pages on your own website or server. In other words, in some cases, the customer may be forwarded to a completely different webpage to complete their transaction. This is not necessarily a major issue, and it just depends what kind of experience that you want your customers to have.
- Settlement periods can be slightly longer (the period of time before they pay the money you have taken online to your normal bank account). Depending on the company, it can be as long as 60 days (baring in mind that this is extreme, and not normal). Equally, it can be immediate, daily or on a weekly basis (like Paypal or Stripe). Just keep an eye out for this when you are doing your research before applying.
- The charges for processing payments can be slightly more expensive than for method 1 described above. It’s normally not extortionate, and can be worth it for a quicker and more simple set-up process. This is simply down to your discretion and what you are after.
Important Note: As with method 1, there will be various compliance rules that you will need to conform to, and these vary from company to company. Payment Processing Companies are normally more relaxed about compliance, but there will still be a few things that you need to comply with, so take a look at the guidelines provided by the specific company that you are looking to apply to.
This process is much shorter than applying for an IMA and a Payment Gateway. The application process shouldn’t take longer than an hour or two; it can take up to 24 hours to be approved, and then you’ve got the time it takes to add the payment options to your website. This is the experience we have had with Stripe, and some may take longer, depending on the company and the type of business you have.
- Paypal – this is a good option simply because it’s SO well known, and just using the name itself gives your customers more confidence that their data will be kept safe. A small warning for internet marketers – I have heard stories that Paypal can withhold money if there is a sudden increase in activity, for a fear that it was taken fraudulently (a bit like the banks can do as I explained above). It’s never happened to us, but it’s something to be aware of – if you expect to take a large sum over a very short period of time, be aware that you may run into difficulties.
- Stripe – Stripe is a really great alternative to Paypal. It works in a very similar way, and I haven’t ever heard of them withholding funds from anyone that I know because of an influx in activity. They also give you the option of having multiple different websites on one account with different invoicing capabilities for all of the different websites. It’s about the same price as Paypal as well, if not a little bit cheaper! So all around, this is a great option if you’re looking for a payment-processing company to handle your payments from your website.
- Google Checkout – if you’ve got a Google account, and you want a quick and easy way to start taking payments online, Google Checkout could be for you. It’s simple and easy to set up, and you could be taking payments in just minutes. There are also a lot of integration options to make it integrate seamlessly with your website.
- Personally we use Stripe. It’s relatively inexpensive, it integrates well with WordPress, and it’s not quite as strict and rigid as Paypal is. Do drop us a comment below and let us know what your thoughts are on payment processors, or if you’ve had any particularly good or bad experiences when taking payments online!
Other Things That You Will Need
A Shopping Cart:
I briefly mentioned that you will also need a shopping cart. A shopping cart will serve 2 functions, depending on whether you sell digital or physical products:
- If you sell physical products – a shopping cart will allow you to design a whole online store that people can browse around, see similar items, see recommendations, and add multiple items to a shopping basket before completing their purchase.
- If you sell digital products – you won’t need to use the e-commerce website design features in the same way, but the shopping basket will provide the ability to add any products to the basket, and then for the customer to insert their personal details before being taken to the payment pages (provided by the payment-processing company, or the payment gateway).
- WooCommerce – this is an amazing plugin, and is actually free at it’s lowest level! It’s a WordPress plugin, and will do everything that a business needs. There are extensions that are required for more advanced features which are paid for, but at it’s basic level, it’s a really great shopping cart plugin that will provide you with what you need as an internet marketer. With 8.8 million downloads and the fact it powers 29% of all online e-commerce websites, it’s definitely a great option to consider.
- WP eCommerce – this is another great plugin, and free too. It provides you with the ability to have a shopping basket and shopping cart on your website. Like WooCommerce, there are extensions that are required for more advanced features which are paid for, but it does the basics extremely well.
- MarketPress – another free WordPress plugin that provides your website with a shopping cart. It’s not as big or popular as the other 2 mentioned above, but still seems to have some good reviews on the internet.
- Personally we use WooCommerce, and it’s great and does everything we need it to. Feel free to explore and research and come to your own conclusion. Please tell us in the comments if you’ve experienced any other shopping carts that are super smooth and great to use too!
What to stay away from – unless you are building an e-commerce store for a physical products business, stay away from platforms like Shopify. It’s absolutely amazing if you have a physical products business, but it doesn’t integrate with WordPress, so it’s best to steer clear of this one if you want a WordPress website.
An SSL Certificate:
This is something else that you will need. An SSL certificate means that your website is secure, and provides the “https” and padlock when people are entering their card details. This means that your customers will be confident that their details will be safe and secure – and they therefore will be more likely to complete the transaction.
How to get one – you can apply for one through your website hosting, or you can get one very cheaply at NameCheap.com, and then install it onto your website via the hosting platform you use (you’ll be able to find instructions for doing this on the help section of your hosting website).
Important Note: They will try to up-sell you to having a green confirmation stamp (that displays in the address bar when a customer is making a payment on your website). If you want to give your customers more confidence that their details will be safe, and you have the budget, by all means, get this. But it really is not essential, and for most customers, so long as they see a padlock and https, they will be more than happy to purchase from your site.
And that is pretty much all you need to know about taking payments on your website!
You’ve now got all of the tools and knowledge you need to be able to get set-up and start taking payments on your website.
We have also created a handy checklist for you to download and use when you are setting this up – so that you can make sure that you don’t miss anything out. Just click on the link below to download it (no email address required).
Please leave a comment below if you have any questions, or to tell us about any experiences that you've had when applying to be able to take payments online!
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