How to Add Online Payments to a Website

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Online commerce is quickly becoming the most popular method of shopping. It’s easy to access, faster than visiting a store and incredibly convenient. It’s easy to add an online payment system to an independent website, and there are many options available that come ready-made to help you collect income from your website. Whether you offer monthly subscriptions to your work or sell products directly, there’s bound to be an option that will fit your needs.

Accepting Debit and Credit Cards

Most e-commerce revolves around credit and debit cards due to convenience, but most options can then be linked to deposit into a bank account. These online payment systems use set fee schedules to make their profit.

Some charge fees per transaction, some charge fees by the month and many of them offer payment options based on the user’s needs. Often, they also integrate with social media and other platforms, making it easy to fit a payment system into your existing online image.

Choosing a Platform

The first step is to determine which e-commerce platform is right for you, your website and your product. There are a number of companies that offer online payment transactions:

  • Shopify: Some CMS platforms with e-commerce integrations, like Shopify, offer you the option to create a website with the ability to complete internal transactions. This is beneficial as customers are more likely to buy when they don't need to navigate away from your site. Shopify does charge fees to host your site and per transaction.

  • SquareSpace: SquareSpace, popular for its clean website designs, also has an e-commerce line that is a popular choice for new businesses. Once again, the all-in-one option is appealing to both customers and small business owners alike. You'll choose a monthly plan and sell both products and services right on your own site.

  • PayPal: It's also possible to integrate third-party applications into an existing website. PayPal is one such option, a global company whose platform can be used to make payments and money transfers, and it will work with both credit cards and direct bank accounts. PayPal is well known and well established and is easily accessible on mobile platforms as well. PayPal’s biggest disadvantage is the fees it charges for certain types of transactions, which often scale with the amount of money being sent.

  • Stripe: Stripe’s offering works with credit, debit and direct accounts as well as mobile payment platforms like Apple Pay and Android Pay. Its biggest advantage is its flexibility; the platform easily integrates with many other applications and can be tailored depending on the marketplace in mind. There are no setup or monthly fees for Stripe and no hidden or surprise fees either.

  • Dwolla: Dwolla’s focus is actual bank transfers, allowing users to create a payment platform where payments are received within a day. Its operation is much like PayPal, but it allows more immediate, on-demand e-commerce. Dwolla offers a series of levels for users that clearly dictate how fees and costs will be calculated.

  • Square: Square is best known for its card-reading accessory that allows independent business owners the ability to accept credit and debit card payments on their mobile phones. The Square Cash app is the e-commerce version, where money can be sent, received or transferred much like the other offerings. Square is best for those who already use the Square card reader for their business.

  • Skrill: Skrill’s version is an alternative to PayPal, offering instant transactions, low fees, currency options and convenient communication within the application itself.

  • Venmo: Venmo is owned by PayPal, but they target different markets. Venmo is designed for more personal, casual transactions

    for example, paying back a friend for lunch. It operates much like a social media network might.

    * Network-based platforms: Apple Pay, Google Wallet and Android Pay also offer their own platforms for online commerce. They usually link with an existing phone account and can be used to make payments just like any of the other offerings.

Payment Security Concerns

One of the most important factors to consider for any online payment system is security. Financial information is incredibly sensitive, and customers need to feel comfortable using it on your website. You’ll save a lot of time and hassle by making sure your network is secure and your payment platform provides enough security to avoid the following issues.

  • Fraud is one of the major players in online commerce because the credit card does not have to be physically present for a transaction to be made. In fact, payment platforms usually allow customers to manually input their card information, meaning there’s no way to tell whether the order is coming from an actual customer or a thief using the credit card account. Your protections mainly come from the policies of the individual credit card companies regarding customer fraud. Check the policies of the platforms you are considering to see what protections they offer.

  • Chargebacks can be related to fraud but can also be caused by other types of customer disputes. Chargebacks occur when customers contest a previously made payment on their card — valid reasons include fraud, incorrect or damaged products or other errors — and the credit card company takes up their case to transfer back money from the company to the customer. Credit card companies and banks often charge high fees for chargebacks, which can be incredibly damaging to the business.

  • International payments can open insecure doors in financial transactions due to the different laws, regulations, standards, systems, currencies and languages in the country in question. It’s best to ensure your chosen platform has experience and can handle international business with guaranteed security for your customers.

  • Phishing scammers can pose as a representative from your website and ask customers for personal data that will allow access to their accounts and thus their financial transactions. To avoid this, make it clear how your business will communicate with customers and remind your users to question any requests for passwords or other personal information that may come from unidentified sources.

Risk and Protection Considerations

In addition, any online presence needs to have protection against malware, DOS attacks, viruses and the standard online risks. The company providing the online commerce system should have detailed information on how it keeps transaction information safe and secure, including encryption standards being employed. Most companies like Shopify and SquareSpace do offer this protection, and also provide visible cues indicate safety to customers browsing your site. With the online landscape being such a growing market, online payment system companies need to update and evolve their security methods over time.

This is where the use of an existing online payment company has advantages over a homegrown or self-programmed payment system. These companies are well aware of the risks involved and will provide information on how they protect their customers. Their methods of protection can become your methods of protection.

User accounts can add a layer of protection to financial transactions online. For example, PayPal requires both parties to be logged in to individual accounts to perform the transaction, adding an additional check. Some services like Apple Pay and Google Wallet initiate from a physical device, like a mobile phone. Consider adding user-account ability to your website’s functionality; not only will it help personalize the experience but it can add a layer of security as well.

Online Payment Legal Considerations

At the moment, there are no specific legal considerations regarding online payment systems in the United States, although existing laws regarding the release of financial information and identity theft apply to online transactions as well as personal ones.

This means that it’s the contract that mainly governs the relationship between businesses, online payment services and customers. It’s the business owner’s job to review the contracts from platforms being considered to check for hidden fees, cost escalations and liability issues that may not be fully explained.

Similar to opening a credit card account, make sure you know the details of the contract agreement and how it can affect both what you see and what the customer sees. The business may be liable for unexpected charges in the case of errors or mistakes on the part of the application or the users.

Online Payment Tax Considerations

For any business owner, it’s important to understand the laws about how your sales will be taxed by your state and national government. Something to consider when adopting an online payment system is the required method of charging tax. There are two types of tax to consider: sales tax, which is the amount a government charges for the sale of goods and services, and income tax, which is the tax paid to the government on income at certain levels.

Payment systems like PayPal allow amounts to be sent between accounts with no tax information. If these transactions are in fact income, that income will need to be taxed at the end of the fiscal year. In industry, income tax is automatically pulled from paychecks, but for self-employed freelance contractors, the burden is on them. For new business owners who find PayPal the most convenient method of online payment, it’s important to be able to estimate the level of income tax you’ll owe.

If your goods sell in different states or even different nations, sales tax regulations may apply in unexpected ways. E-commerce is still required to comply with out-of-state tax laws by federal law, and some states use their standard tax laws for out-of-state transactions, while some do not. When adopting an online payment system, take the time to look into how to manage sales tax on the goods and services the website will offer and be sure the payment platform is set up accordingly. Since most of these services already do business internationally, it’s likely that they will have options you can choose to meet your needs.

Add Online Payments to Your Website

Once you have chosen your desired payment platform and have an understanding of the risks and requirements involved, it’s time to integrate this platform with the existing website (unless you are choosing an all-in-one e-commerce choice like Shopify or SquareSpace). To start, you’ll need to develop a pricing schedule. For services that act like subscriptions, this will be a recurring monthly charge for customers. For goods that are sold individually, the customer will load an online cart of sorts and then complete the transaction once finished.

The complexity of adding the online payment service to the website will depend entirely on the platform chosen. For example, PayPal allows users to create sales buttons for goods and services using the “Merchant Services” settings within PayPal. This will produce an HTML code that can be used to add a purchase button to existing product pages. Other platforms will offer similar options, allowing customers to browse as needed, gather a set of items to purchase and then complete the transaction using a credit card payment.

It may be convenient to offer multiple options. At the moment, the most popular commercial players are PayPal, Apple Pay, and Google Wallet. Some of the other platforms are more customizable, meaning they may better suit the overall online presentation of the sales website. Many of the options make implementation with an existing website incredibly straightforward.

Significance of Online Payment Options

With the way online commerce is growing, it’s important for independent business owners to be able to keep up, and adding online sales options to the company’s website is an excellent step to take for businesses that want to expand into online markets.

It’s important to be aware of the risks that are involved and to understand the cost of these transactions and the systems used to safely and securely execute them. As e-commerce grows more and more common, it will continue to become easier to integrate with any sort of business.