Accepting Payments Online and Over the Phone: Our Business Guide

If your business doesn’t accept payments online, you’re likely missing out on potential sales. A majority of consumers prefer to shop online, and they demand a seamless experience when checking out on a business’ website.

The good news is that it’s easy to add an online checkout to your existing website without a major overhaul. Accepting online payments is also one of the cheapest ways to take credit card payments, with payment processing companies often offering lower transaction fees for online sales.

In this guide, we’ll explain how to take payments online in three easy steps and help you choose the best payment provider for e-commerce.

Key Takeaways

• You can accept payments on your website by signing up for a merchant account and integrating that provider’s payment gateway into your site. Alternatively, you can use an all-in-one website builder with a built-in payment gateway.
• Online payment providers vary widely in what payment methods they support, how much they charge for payment processing, whether they handle PCI compliance, and what degree of customer support they offer.
• You can expect to pay around 1.0% to 1.5% + 20p to 30p in processing fees per online payment.
• If you host a payment gateway on your site, it’s up to you to take steps—like using SSL encryption and two-factor authentication—to keep customers’ card information safe.

How To Take Payments Online in 3 Steps

Taking payments on your website is straightforward. Let’s walk through the steps involved.

Step 1: Choose a merchant account provider

In order to accept payments online, you’ll need to have a merchant account provider.

Merchant account providers act as intermediaries in credit card processing, communicating with your customer’s bank to ensure payments proceed smoothly. They also provide the payment gateways you’ll need to accept payments on your website, which we’ll cover more in the next step.

If your business already has a merchant account provider for taking in-person credit and debit card payments, it can save you time and money to stick with the same one. However, you can use a different provider for online payments, and it may be worth shopping around if your current provider offers limited support for e-commerce.

Step 2: Add a payment gateway to your website

Once you have a merchant account, you can start processing in-person card payments with a card reader. However, before you can accept payments online, you’ll need a secure way for customers to enter their card details on your website.

The solution is a payment gateway—a secure checkout page or widget that you can integrate into your website. Customers enter their card details into your payment gateway, which passes that information to your merchant account provider for processing.

Most merchant account providers offer payment gateways at little or no extra cost. Your merchant account provider’s support team can also help you integrate the payment gateway into your site, so you don’t need a ton of technical knowledge to accomplish this.

Always test your payment gateway after adding it to your site. This is a good way to evaluate the customer checkout experience, and it ensures that payments actually go through. If you run into any issues, contact your merchant account provider’s support team again.

Step 3: Launch your online store

With your payment gateway up and running, you can accept payments online. Just launch your online store to start taking orders—customers will automatically be directed to your payment gateway when they’re ready to check out.

Tips for Choosing a Merchant Account Provider and Payment Gateway

The biggest decision you need to make when setting up your business to take online payments is what merchant account provider you want to use—whether that’s the one your business already uses for in-person payments or another provider specifically for taking online payments.

Your provider determines what types of payments you can take, how the checkout experience will feel for your customers, and how much you’ll pay in fees for each transaction.

Here are some key factors to ensure you get the right merchant account provider for your business.

Consider what online payment methods you want to accept

While nearly all merchant account providers can process credit and debit cards from Visa, Mastercard, and American Express, it’s worth considering whether you want to offer your customers other payment options during online checkout.

For example, you could offer checkout with digital wallets (like Apple Pay or Google Wallet), a bank transfer, buy now pay later, or even cryptocurrencies. You could also offer checkout in multiple currencies—important if your business serves customers around the globe—or let customers sign up for recurring subscriptions.

Offering more payment options can help your business appeal to a wider customer base and make it easier to sell high-value items or subscriptions. Not all merchant account providers support these alternative payment methods, so look for providers that do.

Compare payment gateway and processing fees

Many merchant account providers offer a free payment gateway, but some charge a monthly fee. In addition, providers can offer widely varying rates for processing payments through your payment gateway. As an example, Square’s online payment processing fees start at 1.4% + 25p per transaction, while GoCardless’ online fees start at only 1.0% + 20p per transaction.

It’s worth thinking about how much you expect to sell online and choosing a provider that offers the lowest overall fees for your business.

Consider your customer experience

Payment gateways can be divided into two categories: those that are hosted on your website and those that are hosted on your merchant account provider’s website.

If your gateway is hosted on your site, customers never leave your website during checkout. It makes for a seamless, on-brand purchasing experience. The catch is that you’re responsible for ensuring your checkout process is payment card industry (PCI) compliant, which we’ll cover in more detail below.

If your gateway is hosted on your payment processor’s website, your processor takes care of PCI compliance for you. However, customers have to temporarily leave your site to check out, which can result in more abandoned carts and lower customer satisfaction.

If you choose a gateway hosted on your processor’s website, ask about options to customise the checkout page with your business’ branding.

Evaluate customer support options

Every minute your payment gateway is down, you’re missing out on potential online sales. So, your merchant account provider must respond quickly when you need support. Look for providers that have a strong reputation with users and offer multiple ways to get in touch, including by phone and live chat.

How Much Does It Cost To Take Payments Online?

Taking payments online can be relatively inexpensive. Processors like Square, Stripe, SumUp, and others charge no monthly fees for your merchant account and no fees for your payment gateway. Transaction fees for online card processing vary but are typically around 1.0% to 1.5% + 20p to 30p per transaction.

Other merchant account providers, like WorldPay and Takepayments, charge monthly fees of around £20 per month and processing rates of around 1.3% + 20p per transaction.

In general, per-transaction processing fees are slightly higher for online payments than for in-person payments. This is because online payments have a higher incidence of fraud and chargebacks, so merchant account providers charge higher rates to compensate for the added risk of online transactions.

However, the extra cost isn’t much, and there’s no hardware required to read customers’ cards, so taking online payments is still a cheap way to accept credit cards.

Alternatives To Using a Payment Gateway

While using a payment gateway is the most common way UK businesses accept payments online, it’s not the only option. Below, we take a closer look at two alternative solutions for taking payments online.

Website builders

Many all-in-one website builders, like Wix, Squarespace, and Shopify, offer built-in payment gateways with their online store plans. In this case, the website builder (or a partner company) acts as your payment processor. You don’t need to open a separate merchant account or integrate a payment gateway.

While website builders can be great for business owners who aren’t super tech-savvy, they can also be much more expensive than hosting your own site and integrating a payment gateway. E-commerce plans with Wix, for example, start at £25 per month, and you’ll need to pay processing fees of 2.1% + 20p per transaction.

Payment links

Instead of having a payment gateway on your site, you can send customers personalised payment links. Payment links work a lot like having a payment gateway hosted on your merchant account provider’s website.

When customers click a payment link or scan a QR code, they’ll be taken to a payment page on your merchant account provider’s website. They can then make a payment by credit card, debit card, bank transfer, or another method that your provider supports. Customers never enter payment information directly on your website, so you don’t need to worry about PCI compliance.

How To Keep Online Payments Secure

If you host a payment gateway on your website, it’s crucial to ensure that you fully comply with PCI requirements and keep your site secure. Otherwise, you risk leaking customers’ card information or exposing your business to costly fraud and chargebacks.

Here are a few tips to help you secure your online payments:

• Use SSL encryption: Secure Sockets Layer (SSL) is an internet protocol that encrypts data transferred to and from your website. It’s essential because it encrypts customers’ card information when they enter it on your site and when your payment gateway passes it on to your merchant account provider for processing. You can add an SSL certificate to your site for free using sites like LetsEncrypt.org.
• Enable two-factor authentication: Two-factor authentication requires you to have both a password and an authorised mobile device to log in to your website’s back end. This makes it much more difficult for potential intruders to steal customer card information transmitted to your site.
• Require CVV (card verification value) codes during checkout: A credit or debit card’s CVV code is physically embossed on a customer’s card, making it hard to be stolen during attacks that target cards’ magnetic stripes. Requiring this code at checkout makes it more difficult for fraudsters to make purchases on your site.
• Keep your website up to date: An outdated content management system or plugin is one of the main ways attackers break into websites. Always make sure your website’s software is up to date. It’s also a good idea to run weekly or monthly malware scans to ensure your site is safe for customers.