How to Accept Credit Card Payments from Customers Online

As a business owner, you need to receive payment one way or the other. Nowadays, the best way to go is online, as most businesses are conducted online without meeting your customers. One of the questions business owners often ask is how to start taking card payments. This guide will show you what you need to know and how you can get payments via credit cards with minimal risk.

There are several ways to enable card transactions today — including in-person, online, via mobile apps, and through payment links — depending on your business model and customer preferences.

Before accepting card payments, you must ensure your business is compliant with local laws and has the necessary infrastructure in place. That often includes understanding the requirements for Indian Pvt Ltd companies.

Credit Card Payments in Person

In-person payments are the traditional way most retailers accept cards. In this case, the customer will present his or her card for payment while the business owner will have a POS system to receive the payment. The in-person transactions carry fewer risks because the cardholder is present throughout the entire exchange.

Card Payments over the Phone

This transaction usually takes place over the phone and especially when customers are taking orders. The common practice, especially if the customer is placing an order for food at a restaurant, will be to share payment details with the vendor. The vendor, in turn, enters these details into the card reader. This method carries significant risk, especially if not supported by tokenization, 3D Secure, or secure mobile payment apps.

Card Payments Online

Online payments are the third method used and will be our main focus in this article. Most businesses accept online card payments through the help of digital service providers. In this case, the vendor will rely on a card processing company to manage the transactions.

Online transactions have become more cost-efficient and secure due to advanced fraud detection, PCI DSS compliance, and industry-standard encryption. If you intend to start accepting credit card payments, you will need certain things like your website or e-store and a payment gateway.

Ways of Credit Card Payment Processing

Like we already mentioned, to accept card transactions online, you will need to have certain things in place, such as your website or e-commerce store. We have listed the essential steps to start receiving these payments.

1. Choose a Credit Card Payment Processor

Many companies offer payment processing, and these services come at a paid rate. After you have decided that you want to accept payments online, you can find a reliable card processing provider. You will also need to consider the type of cards your business will be accepting. Currently, we have issuers like MasterCard, Visa, American Express, Discover, and many others. The fees for processing these card types usually vary, and that is why you must get a provider that offers a reasonable rate for most of these credit cards. Another factor that can influence your choice is the volume or number of transactions you conduct daily. Some providers have better rates for businesses handling a large volume of transactions.

If you manage only an online business, it will be easy to have your provider link your payment systems to your website.

2. Open Merchant Account

When you have finally got a credit card processor, you can proceed to open a merchant account. It is always good to have a separate business account that is focused on card payments. Many payment service providers now offer merchant accounts bundled with gateway services, removing the need for direct bank interaction. The requirements vary depending on the bank you choose to use, but typically include documents like your business registration and a cancelled cheque to verify your banking details.

3. Set up Payment Terminals

You need to set up a payment terminal across your businesses. That is if you are managing both an online and a traditional store. For store operations, you will need a card reader or POS system to accept payments. You can accept payments via integrated e-commerce platforms like Shopify or WooCommerce, or without a website using hosted checkout pages, payment links, or mobile POS solutions. If you own your website, you can get your credit card processor to integrate card payment functionality into your business website. Your website can support multiple ways to accept payments, such as cards, wallets, or UPI. You can use any of the following options for your online payments:

• Hosted Payment Form or Checkout Page: 

Hosted checkout pages can be embedded on your website or shared as stand-alone links via messaging apps, social media, or email. Since your credit card processor handles the transaction securely, it is very safe and won’t expose your customer’s transaction data. It is important to note that once you begin accepting credit cards, you will need to comply with Payment Card Industry Data Security Standards (PCI DSS).

• Shopping Cart:

You also have the option of integrating a shopping cart into your e-commerce store. After you have included all your products on the e-commerce platform, it will be easy for customers to check out payments on the shopping cart.

Benefits of Card Payments for Your Business

It has become part of the business tradition to include cards as part of payments. Most businesses have adopted this method and are going cashless. There are many benefits of accepting cards, and here are some of them:

Increase in Sales and Profits

When you give your customers multiple options to pay for goods and services, it will increase the customer base. It will also attract more people to want to conduct business with you.

Encourages Your Customers to Spend

It has also been observed that customers are inclined to spend more using credit cards. If they had cash and were to look at the cost, they may be discouraged. However, since online payments are seamless, they will feel comfortable purchasing goods from your business.

Increases Cash Flow

Another benefit of card payments is that the payment is faster and seamless. Card payments are typically settled within T+1 or T+2 days, but same-day settlements (T+0) are now offered by many platforms depending on your provider.

Fosters Customer Loyalty

When you offer your customers multiple ways to pay for your services, it increases trust. They know they can count on you to provide them with a seamless way to get the things they need. The key to a successful business is having return customers, and adopting credit card payments will undoubtedly keep your customers coming back.

Some of the Credit Card Payment Risks to Remember

Although the benefits of using cards outweigh any negative side, we also need to remind you of the risks attached to card payments. There is always the risk of third-party unauthorised access and fraud, primarily because of the data exposure. Businesses are expected to comply with the Payment Card Industry Data Security Standards (PCI DSS) when accepting card payments.

The PCI DSS has a set of guidelines that you need to comply with to keep your customers’ transaction data safe. The PCI DSS was established by issuers like Visa, MasterCard, American Express, and others to ensure the safety of cardholders’ details. The system is designed to prevent hackers from gaining access to people’s financial data and control fraud.

As a business owner accepting card payments, you need to be PCI compliant. If you have a compliant card processor provider, it reduces the risk of violations. Most merchant accounts are usually in partnership with third-party vendors which are already certified. This will help identify any vulnerabilities and will keep your business PCI compliant.

If a business fails to comply with the PCI DSS requirements, it comes with penalties and fines. This can be:

• Payments of fines between $5,000 to $10,000 per month until compliance is met.
• You may get lawsuits and damages in the case of a breach.
• Violators will be liable for costs resulting from fraudulent losses.

Another thing you should bear in mind is the costs or charges associated with accepting credit card payments. The cost usually does not fall on the customer but the business accepting these payments. The charges or fees typically vary depending on the card company. You will need to find out these charges when accepting card payments. Other than these two, businesses enjoy a seamless experience with online payments. It is safer than other payment options and you get your payments immediately.

Bottom Line

You can start receiving card payments now that you know everything involved. It is easy to set up once you have a credit card processor and a payment gateway. At Paykassma, we are happy to help you with the process of accepting payments for your online business. Our experts will provide the much-needed advice to ensure you remain PCI DSS compliant. We suggest you start receiving card payments if you haven’t already. There are a lot of benefits attached to it, and you get to grow your business.