With any ecommerce business, the payment page is one of the most essential parts. As a business owner, you must focus a lot on improving this page in order to bring the secure checkout process and highest satisfaction for your customers. In this article, ArrowHiTech will deliver you some outstanding ecommerce payment processing solutions you need to know to develop your business more and more. Let’s explore with us right now!
What is ecommerce payment processing?
Along with the development of ecommerce business, the ecommerce payment processing becomes more and more popular. To put it plainly, an electronic payment system that supports the acceptance of electronic payment for online transactions is called ecommerce payment processing.
In fact, each eCommerce business is not the same. However, they all must ensure the main goal is to make the online checkout process as simple as possible while maintaining client trustworthiness through a secure payment transaction.
What are online payment methods?
The first online payment method you need to know is credit card. To put it plainly, it is a little plastic card with a series number that is linked to an account. In fact, they are one of the best and most common means of electronic payment.
Besides, credit cards also have a readable magnetic stripe. When a customer purchases anything with a credit card, the credit card issuer bank pays on the customer’s behalf, and the customer has a set period of time to pay the credit card bill.
When it comes to online payment methods, we can’t help but mention Debit cards. As quite similar to credit cards, a debit card is also a little plastic card with a unique number that relates to the bank account number. However, between them, there is the main difference in the payment process.
Following that, when you pay with a debit card, the money is immediately deducted from your bank account. And, you must have enough money in your bank account to complete the transaction. On the other hand, with a credit card, you aren’t required to have enough money in your bank account to complete the transaction.
What’s more, debit cards will limit the amount you can withdraw in a day. As a result, it aids in the consumer’s budgeting.
In terms of appearance, smart cards have no difference from both credit cards and debit cards. However, it contains a small microprocessor chip that can save professional and/ or personal information about a consumer. With smart cards, money is kept and debited after each purchase. In particular, customers are provided a PIN that they must use to access their smart cards. Overall, smart cards are considered as one of the most secure payment methods. This is because they store information in an encrypted format. Plus, smart cards are affordable as well as process data more quickly.
The last online payment method in our list is E-money – the most modern way to complete transactions. Basically, E-Money transactions are ones in which a payment is made via the internet. And, money is sent directly from one financial institution to another.
In reality, with the help of advanced technology, E-money transactions are more efficient, easy and time-saving than traditional cash transactions. What’s more, online payments using credit cards, debit cards or smart cards are referred to as e-money transactions.
Components of ecommerce payment processing
#1. Payment gateways
The most crucial element of ecommerce payment processing is payment gateways. They are the most frequent interface between your website and a payment processor. Thanks to payment gateways, you are able to send client information from your website to your payment processor. Besides, it is an indispensable part of any ecommerce website and the place where customers have to send their payment information to finish the transaction.
In addition, payment gateways comes with two biggest functions:
- Firstly, they take the client information you have collected on your site and deliver it (along with payments) directly to the payment processor.
- Secondly, they take payment information straight from the payment processor, not related to your website.
#2. Payment processors
Called payment processors since they handle actual money transactions, meaning they take the customer’s money and credit you. In fact, a payment processor is a third-party service that connects your store and your merchant account. On behalf of customers who use your store’s payment processor, they speak with your merchant account and deposit funds into it.
#3. Merchant account
When it comes to the merchant account, you need to know this is your online store’s “back office”. In reality, it is the interface that connects you to your bank. Usually, it will be implemented through an application, thereby you need to download and fill out. Not as similar to payment processors, the merchant account is fully free. Regular credit card payments do not require a merchant account, however prepaid credit cards, stored credit cards, and taking a customer’s own issued credit card do.
Furthermore, your merchant account links to your store’s gateway and it also charges the customer’s payment information directly.
How do the three factors above work together?
First and foremost, customers enter their credit or debit card information into the eCommerce product page or form on the website or app in order to begin an eCommerce transaction. No matter what they are going to purchase, this stage is the same. Once users click the button to submit the information, the encrypted payment data is sent to the payment processor through the payment gateway. The payment processor will notify the card-issuing bank. Then, the bank will verify that the customer has adequate funds, and the transaction is either approved or denied.
After that, the authorisation or denial is communicated to the payment gateway by the payment processor. The gateway either approves or rejects the merchant’s website. If the transaction is accepted, the customer receives a receipt or order confirmation. And then, the funds are withdrawn from the client’s available credit or bank account and transferred into the merchant’s bank account.
What ecommerce payment processing brings any benefits
The goal of creating ecommerce payment processing is to make accepting electronic payments for online transactions become easier and quicker. With the dramatic development in popularity of online shopping, eCommerce payment processing has become a must-have for both vendors and online shoppers. As a result, buyers can get the best purchasing experience while store owners can simply increase customers’ trust and easily boost sales.
Some of outstanding benefits that ecommerce payment processing offer are:
- Firstly, it helps you broaden many great opportunities to reach out to more potential customers from all over the world.
- Secondly, it makes transactions more effective and efficient. This is due to the fact that transactions are completed in seconds, resulting in saving clients time.
- Thirdly, ecommerce payment processing brings convenience for customers. Following that, buyers can pay for items on an e-commerce website at any time and from any location. In particular, all they need is a device with an internet connection to complete their transactions.
- What’s more, it aids in cutting down the transaction cost as well as the costs of technology.
- Alternatively, clients may keep track of their spending by accessing their virtual accounts at any time and viewing their transaction history.
- Best of all, integrating payments into a website is really straightforward. And, even if you have no technical knowledge, you can accomplish it in minutes with ease.
- Not only that, your transactions are always protected thanks to sophisticated security and anti-fraud capabilities by payment gateways and payment providers.
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Best ecommerce payment processing solutions to give excellent checkout experience
In case you are seeking a flawless ecommerce payment processing method in order to bring the awesome payment experience for your clients, let’s take a look at PayPal. Being one of the best ecommerce payment processing solutions, PayPal is preferably used by 200 countries in 25 currencies around the world. Despite no beginning or termination fees with PayPal, it still comes with the additional monthly fees for onsite processing (also known as PayPal Payments Pro) that can cause discomfort for users.
The next exceptional tool you need to pay attention to in the list of best ecommerce payment processing solutions is Stripe. Although Stripe is a newcomer in this field, it now manages billions of dollars for over 100,000 businesses around the world. First of all, Stripe, dubbed a “full e-commerce toolbox”, now covers 25 countries, with aspirations to expand to all countries in the near future. Besides, Stripe’s base rates are the same as PayPal’s transaction fees, yet Stripe provides many things for free that PayPal charges extra for, such as onsite processing.
Best of all, this ecommerce payment processing solution does not impose additional fees for foreign credit card or American Express transactions. Thus, Stripe users can take advantage of Apple Pay integration as well as free development tools.
One of the most worth-using ecommerce payment processing solutions for you to achieve your business goal is Alipay. With over 400 million users making this payment provider become leading in online payments and is the world’s largest third party online payment platform.
Besides, Alipay is a social payment network that accepts a variety of payment methods. For instance, QR codes, in addition to the standard services provided by payment solution providers based in the United States. Furthermore, users can pay their utility bills online, as well as purchase additional items such as cell phone minutes or commuter passes.
4. CC AVENUE
Coming to another ecommerce payment processing solution you should pay attention to is CC Avenue. In fact, CC Avenue is one of the most affordable ecommerce payment processing solutions that focus a lot on India and China – two biggest and potential markets in the world. Firstly, CC Avenue is India’s largest payment gateway, allowing real-time, multi-currency transactions with a variety of payment methods. Besides, this solution aids a lot of small businesses (2,20,000 small ones in India) to achieve outcomes as they expect. Additionally, it offers free, simple setup as well as the option to handle payments via mobile platforms, social media websites, and (SMS) text messaging to international clients.
5. Bitcoin and Cryptocurrency
Last but not least in our list is Bitcoin and Cryptocurrency. It is one of the most affordable ecommerce payment processing solutions you can’t miss. In fact, accepting a virtual currency or cryptocurrency, such as Bitcoin, results in more revenue and a larger consumer base. Best of all, users of the Shopify platform can accept Bitcoin as a payment mechanism. Simply speaking, Bitcoin is both a digital system and a virtual money, with transactions carried out via one-of-a-kind Bitcoin addresses. Besides, the absence of complex security compliance procedures and delays is a result of freedom from banks and government oversight. Moreover, instant processing is enabled by the absence of global boundaries and time zones.
In addition, bitcoin transactions are completely anonymous, and it also means no sensitive personal information is stored with them. Best of all, they’re also secure and irrevocable. Bitcoin benefits merchants by removing the restrictions of PCI compliance and fraudulent chargebacks, while Bitcoin spenders profit from the benefits of bitcoin use. Furthermore, bitcoin is a legal means of payment in Japan and Germany, as well as a popular investment alternative and a highly active global payment mechanism.
To sum up, no matter what ecommerce payment processing solutions you choose, it will have a big impact on delivering the perfect checkout experience to clients. ArrowHiTech hopes through this blog, you can get a lot of useful information. And then, select the right solution for your business. In case you have any inquiry on this topic, don’t hesitate to CONTACT US immediately to be clearer.