How to accept payments online: Top 3 ways to get paid in 2019

How to accept payments online: Top 3 ways to get paid in 2019
Business Development Specialist
Yuliia Mamonova

Choosing a convenient method to accept payments online is crucial for your eCommerce success. However, how to choose the right one? It’s high time you learned how to collect money online. We analyze the three most common ways merchants get paid and give valuable advice on accepting payments online. 

Accept credit card payments online

Almost 75% of customers prefer to pay via a debit or credit card, both online and in person. Thus, credit card payments come first. Visa and MasterCard are the most popular types of credit card brands. Therefore, including them as your payment option is a must.

Local credit card options should not be underestimated as well. You should offer them according to your target audience’s GEO. This way, you will increase the chances of conversion. The government is the body in charge of credit card payments.

What is the difference between credit card payments, mobile banking, and QR code?

Some people believe that mobile banking, credit card payments, and the QR code scanning are three different things. In fact, it all falls under the category of credit card payments. Why is it so? Though payment methods vary, the money is transferred from the customer’s credit card to the merchant’s bank account. Thus, they are all considered to be credit card payments.

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What are the advantages of credit card payment processing?

  • Ability to get “live” money. Simply put, you don’t need to convert funds, unlike with PayPal dollar or crypto. All the money is paid to you by a bank or a financial institution of your client. 
  • The automated payouts. Unlike in PayPal, you don’t need to apply for a payout manually. The money is automatically transferred to your bank account. The regularity of payouts depends on the PSP of your choice. Generally, you get the money once a week or so. 

What are the disadvantages of credit card payment processing?

  • High transaction fees. Though varying from a PSP to PSP, credit card transaction fees are considered the highest. Your business type is the main factor shaping the fee structure. Merchants who sell cakes pay lower fees than those who offer escort services. The high level of chargebacks and possible risks are to blame. 

Accept electronic money (PayPal, Skrill, WebMoney, Stripe). 

The electronic aggregators like PayPal, Skrill, WebMoney, and Stripe are the alternatives to credit card payment processing. The critical difference is that clients don’t need a credit card to accomplish the payment. They log into the aggregator account and pay from it. Unlike in credit card payment processing, the entire process is regulated by the eminent, not the government.

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What are the advantages of electronic money payment processing?

  • Low transaction fees. If comparing the credit card payment processing, electronic money providers have more affordable prices. 
  • Brand awareness. The majority of people know what PayPal is. Brand awareness decreases possible concerns and helps clients pay. 
  • Easy integration. To accept credit card payments, you need to adjust your website. In case of PayPal, Skrill, e.g., the integration does not require any tech efforts. 

What are the disadvantages of electronic money payment processing?

  • Quasi money. Merchants can’t get the “live” money straight away. Instead, they get so-called quasi money like a PayPal dollar. Later, businessmen have to convert that money into real dollars. That leads to conversion risks. 
  • Restricted countries. Though popular, electronic money services only function in specific areas. Merchants from Africa, Asia, Eastern Europe, and the Middle East are often restricted from using them. 
  • Manual payouts. Usually, the payouts should be submitted manually. That takes time and effort. 
  • Payouts limits. PayPal allows you to withdraw a limited amount of money. That is a part of the security policy of a company. Sometimes, the company also requires an approvement from a customer who paid for your services. Thus, don’t think that aggregators give more financial freedom than banks.

Accept remittance system transfer

This is the easiest way to get funds from a customer. The core principle behind remittance systems is the bank-bank-bank-bank transfer. Simply put, money is transferred directly from the client’s bank account to the merchant’s bank account. The two most popular remittance systems are SEPA and SWIFT. You can integrate both options on your website as a payment method. 

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What are SWIFT and SEPA?

SWIFT is a global remittance system that is regulated by American Financial Services. It mostly processes dollars and is used by U.S. merchants. 

SEPA is a European remittance system. It only allows euro transfers what makes it unfavorable for American-based companies. However, it is not regulated by American Financial Services. It gives SEPA users more flexibility and financial freedom. The payment processing fees of SEPA are high. However, they are favorable for those merchants who accept large sums (thousands of dollars and more).

What are the disadvantages of SWIFT and SEPA?

  • The payment transfer takes up to three days. The plus is, you get the natural money and don’t need to convert them. However, for those merchants who need to ship their products immediately, such an option won’t work. 
  • The transaction fees are high. That might become a burden for small businesses or dropshipping companies. 

Accept cryptocurrency

A cryptocurrency is a popular option for merchants willing to accept payments online. Once the crypto payment is accepted, a merchant takes payment in crypto, as well. Later, he/she may convert them to FIAT either with the help of a merchant’s PSP or a crypto-exchange agency.

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What are the advantages of cryptocurrency?

  1. No chargebacks. No chargebacks or refunds are possible when paying with crypto. Such a benefit makes cryptocurrency payment processing highly valued among high-risk merchants. 
  2. Low fees. If comparing to credit card processing, the cryptocurrency transaction fees are much more affordable. As for 2019, cryptocurrency transaction fees are the lowest on the market.

What are the disadvantages of cryptocurrency?

  • An absence of the E-wallet. In 2019, a large part of clients doesn’t own digital wallets. The growing demand for alternative payment methods might change the situation in the nearest future. 
  • Redirection on a payment page. Speaking about cryptocurrency payments, customers are inevitably redirected to their digital wallets. That decreases the chances of repeated purchases. Crypto payments inside merchants’ websites are not available today. 
  • Fluctuation. You might lose on a swing. The exchange rate of FIAT is to blame. It is not stable and tends to change unexpectedly. You might lose money when doing the payout of crypto in euro or dollars.

What payment option is the best?

There is no right or wrong answer to such a question. It all depends on your business needs and goals. Thus, the best solution for processing payments is individual. Here are some tips on choosing the best way to accept payments online:

  1. Low-risk small business owners that sell inside their countries benefit from using credit cards. Finding a local bank is a win-win option for them. It will smooth the application process.
  2. High-risk business owners benefit from crypto and electronic payment solutions. Sometimes, they require a foreign bank due to their country regulations.
  3. Both low and high-risk business owners who sell internationally need to offer a wide range of payment options. When choosing a PSP, make sure that it accepts a variety of currencies and payment options. 
  4. Those who target millennials and Gen Z audience should include mobile banking. This is the most popular payment method among young adults. 
  5. Using SEPA is beneficial for European merchants who deal with large amounts and high-risk industries.
  6. Using SWIFT is a good solution for Americans running low and middle-risk businesses.

How to start accepting payments online

To start accepting payments online, you’ll have to take three steps:

  1. Create an e-commerce website.
  2. Choose a PSP (payment system provider)
  3. Apply for a merchant account.

To open a merchant account, you’ll have to collect a list of documents and submit an online application. Once the application of yours gets approved, you get a payment gateway. It is the unique software that encrypts information provided via a payment page. Right upon the payment gateway setup, you can accept payments online.

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List of documents to open a merchant account:

Here is a list of documents to open a merchant account and start accepting payments:

  1. Certificate of incorporation. The paper shows the main aspects of company formation. It usually includes legal address, name, and type of the corporation.
  2. Certificate of incumbency (or equivalent). The document holds the information about the company’s owners – their names and positions they occupy.
  3. Passports’ copies of all company owners and officers with their signatures. The scanned copies of directors & officers’ passports.
  4. Application. Usually, it is an online form on a PSP’s website.
  5. The processing history. Different PSPs have different requirements. However, high-risk business owners always need to provide at least six months of processing history.
  6. License. Attach a license issued by your country’s responsible body.
  7. Turnover. Clarify your turnover amount so that the payment processor connects you to the most appropriate bank.

From crypto to debit cards, Ikajo International accepts 150+ payment methods. Reach us out for an individual consultation on payments. We are here to provide you with a safe payment solution that will make your revenue grow. By the way, we also offer recurring billing for free. 




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