[fusion_builder_container hundred_percent=”no” equal_height_columns=”no” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” background_position=”center center” background_repeat=”no-repeat” fade=”no” background_parallax=”none” parallax_speed=”0.3″ video_aspect_ratio=”16:9″ video_loop=”yes” video_mute=”yes” overlay_opacity=”0.5″ border_style=”solid”][fusion_builder_row][fusion_builder_column type=”1_1″ layout=”1_1″ background_position=”left top” background_color=”” border_size=”” border_color=”” border_style=”solid” border_position=”all” spacing=”yes” background_image=”” background_repeat=”no-repeat” padding=”” margin_top=”0px” margin_bottom=”0px” class=”” id=”” animation_type=”” animation_speed=”0.3″ animation_direction=”left” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” center_content=”no” last=”no” min_height=”” hover_type=”none” link=””][fusion_text]

A guide to online payment processing

Setting up an eCommerce website and the ability to accept payments online is a multi-step process that can include questions about picking the right shopping cart to finding a payment processor and whether to collect sales taxes or not. This is a guide to online payment processing designed to address most questions that you might have before setting up an online store.

Types of eCommerce Storefronts

There are basically two options to setting up a storefront on the internet:
(1) Selling your products on someone else’s site, like Alibaba or Amazon,
(2) Setting up your own eCommerce storefront (usually come with a monthly subscription fee).

Options for Getting your Store Up

Here are some major shopping carts available for eCommerce sites:
Shopify, Amazon, Ubercart, WooCommerce, Ultracard, Magento, Goodsie, and Foxycart

Although shopping carts are designed to handle payment processing, most can provide basic business functions such as inventory management and product pricing to integrating with your accounting and logistical systems. It’s important to know that in order to process payments, your shopping cart needs to be connected to a merchant account and payment gateway.

Merchant Account

The merchant account works like a temporary bank account. They hold your money when a shopper makes a purchase and then they transfer it your actual bank account. Your existing merchant account for your brick and mortar store might be able to offer you payment gateway service, if they do online payments.

Some payment gateways, like Century Business Solutions, offer both a merchant account and payment gateway.

Payment Gateway

The payment gateway processes credit card transactions for you. They authorize the credit card purchase and capture the payment (meaning place a hold on the card for the payment amount). Then they credit your merchant account (i.e., settlement) typically at the end of the day.

With the shopping cart company, you can generally pick your own payment gateway. Sometimes there is the need to work with more than one payment gateway at the same time if, for example, you also will accept PayPal.

Types of Payments

The majority of online payments are credit and debit cards. But new payment types are gaining ground including Apple Pay and digital wallets like GooglePay. Merchants today need to accept gift cards and coupons and depending on the nature of their businesses they might need to accept multiple currencies as well.

Integration with Accounting Software

Closely related with the need to pay sales taxes is the need to pay vendors and issue replenishment orders to your inventory system. To help with that, the shopping cart should have a connection to those systems to reduce manual entry and improve accuracy. For example, Freshbooks, one of the most popular cloud accounting systems, has an add-on for Magento. Whether you use QuickBooks, Acumatica, Exact Macola, or another ERP, check to see if your shopping cart integrates.

Fraud Protection and Security

Fraud can result in chargebacks for the merchant. Losing customer data due to hacking can cause serious damage to a company’s reputation and brand. There are several ways to reduce the risk of fraud:

Address Verification
This is a service that checks to make sure that the billing address on the credit card and the address entered by the customer match. After all, the customer could make that up.

A token replaces sending credit card data over the internet, where it can be read by hackers, with a special code (token). There are lots of different ways to do this. The token can only be used one time and is generated based on the credit card data.

The shopping cart should be an encrypted web page, i.e., one that starts with “https:://”. Note the “s”. That encrypts traffic between the shopper’s mobile phone or browser and the shopping cart. Whether or not the traffic between the shopping cart and the payment gateway is encrypted is under control of the shopping cart and payment gateway. For example, some of the PCI council standards issued by MasterCard and others do not require encryption between at the POS terminal (i.e., card-in-hand payments). So there is some risk there.

Verified by Visa
The MasterCard SecureCode and Verified by Visa programs help reduce fraud by requiring the shopper to enter a special code generated at checkout. Plus they increase consumer confidence when the shopper sees the logo of those well-known companies and that service on the shopping cart web page.

This is the same code printed on the back of the card that the shopper enters when they pay in the retail store. The idea is if the hacker has stolen the credit card data they probably do not have the CCV code since they do not have the card in their possession.

Finally, all of these items have a certain cost: paying the subscription fee to the shopping cart, payment processor fees, and, of course, credit card fees. Prices will vary depending on how many services you need. It could be that you do not need anything more than a Buy button on your web page. Or you might sign up for everything including shipping services. The best thing to do is read reviews of different companies. So shop around.


We hope this guide to online payment processing will make it easier for you to set up an online store. For any additional questions, please contact us today!