How to Accept Online Payments on Your Website?

| Updated on March 27, 2024

Due to the covid 19 pandemic, online shopping has changed forever. These days majority of people prefer shopping online. Online payments are growing by 104 percent per year. So, most people prefer paying online and if their preferred payment methods are not available, they simply ditch that online store. So, your e-commerce store needs to accept online payments.

You also need to make sure that people trust your online store, else they won’t enter their Credit Card/PayPal details. There are different types of online payments that are preferred by online consumers. As a merchant, you need to keep everything in mind so that the customers do not abandon their cart and leave your website. 

What Comes Under Online Payment?

Online payments basically are the payments made using the internet to the merchant’s bank account or any other wallet. There are many choices when it comes to paying online, like Paypal, Apple Pay, Google pay, Net banking, and many more.

To understand online payments, you need to get acquainted with these concepts thoroughly:

Payment Gateway

It is basically the software application that enables and proceeds the payments to the merchant’s website. Payment gateways either accept or reject the mode of payment used by you by sending the information to the server. This helps you in either proceeding with the payment, or greeting declined. In case your payment has been declined by the payment gateway, check your mode of payment and do it again.

Payment Processor

It basically sends information to the card server to check for any kind of fraud and check whether the customer’s account has the required balance in his/her account or not. Once checked, the payment is either proceeded or declined. In case it is declined, check your balance or change the card and proceed further.

Merchant Account

It is basically a bank account made for business purposes that accepts online payments from the customer. To accept payments, merchants needed to apply for a merchant account earlier, but now they can do so by using payment aggregators as well which is third-party software. 

How does an Online Payment Actually Work?

  1. The customer goes through the items and chooses one, then adds it to the cart and goes on the checkout page.
  1. On the checkout page, he/she chooses a payment method, say it’s a card, so he/she enters the card details.
  1. Next, the information of the transaction is transferred to the payment gateway which transfers it to the payment processor.
  1. The payment processor transfers it to the card server to check for any kind of fraud and to check for the availability of the required amount in the customer’s bank account.
  1. The network of the card then sends information to the bank’s server requesting it to release funds from the bank account.
  1. This information is then transferred back along with the funds and the payment gets successful.

Types of Online Payment Methods

The network of online payments is spreading vastly. To get high rates of approval, you need to make sure that you offer almost all types of payment methods and are flexible enough to offer the local banks as well. Here given is a list of the most commonly used payment methods:

Card Payments

Most customers today pay using either their deceit card or credit card. Statistics say that more than 60% of people prefer paying using cards. When a customer uses a card to pay, the merchant needs to pay the transaction fees. You must have noticed this while purchasing something when the merchant asks you to pay some percentage extra when you are paying using the card.


Although credit cards are more convenient to pay online, they charge huge transaction fees. To avoid this, e-checks were introduced. Payments using e-checks are similar to payments using cash. After the customer’s approval, the money is then sent to the merchant’s server. There are no interchange fees applicable, or even if it is, it is usually very low.

Online Wallets

Mobile wallets are e-wallets that store the customer’s credentials and help them pay within a fraction of a second. Every time they have to pay, they do not need to look for their bank details or the card number. They can simply use their mobile wallet to pay for the transaction. Mobile wallets are widely preferred and favored due to the convenience they bring with them. 

Email Invoices

Once you have made a purchase, you shall receive an email with a link. You can make the payment just by using a couple of clicks. It is as convenient as mobile wallets and saves time too.

Disadvantages of Accepting Online Payments

  1. When a merchant accepts online payments, it increases the cost of fraud. There are many applications in the market that show the message of a successful transaction but the transaction hasn’t actually even started. This leads the merchant to face huge losses at times.
  1. Technical issues are the most common problems when it comes to online payments. This may lead to the abandonment of the cart or loss of sale. The customer might get frustrated and shall not return back.
  1. There are huge service fees applicable to online payments, for the merchants. This decreases the profit margins of the merchants, leaving them with lower profits than the actual ones.

Advantages of Accepting Online Payments

  1. Accepting online payments lets you reach a wider and global audience, which is not possible by checks or offline payments. This increases the profit and reach of your online business.
  1. When you accept online payment, you improve the customer experience, as online payments are seamless. Especially after the pandemic, people have somewhat fully switched to online modes of payment, so they prefer paying online rather than paying in cash. 


After the pandemic, digitization has become one of the most important things. People now prefer paying online more than offline or in cash. A merchant who is accepting online payments is usually preferred these days. So it is better to start accepting online payments to avoid abandonment of the cart. 

John M. Flood

John is a crypto enthusiast, Fintech writer, and stock trader. His writings provide guides to perform your best in the crypto world and stock planet. He is a B-Tech graduate from Stanford University and also holds a certification in creative writing. John also has 5 years of experience in exploring and understanding better about the FinTech industry. Over time, he gained experience and expertise by implementing his customized strategies to play in the crypto market.

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