Accepting credit card payments online is a must for any business in the modern digital age. Because of the proliferation of online transactions, shoppers now anticipate a streamlined and protected checkout procedure. Hence, a secure and user-friendly online payment system is essential for running a successful business. Online credit card payments are straightforward.
Business growth and customer convenience increase when credit card payments are accepted online. In this article, we’ll go through what it takes for Indian companies to accept credit card payments online.
The steps to accept credit card payments online in 2023 are as follows:
1. Choose the right payment gateway.
A payment gateway is an intermediary service that ensures the safe transmission of funds between customers and merchants. In India, you can use any number of different payment channels, including PayU, Razorpay, Instamojo, etc.
The following criteria should be used to help firms select a payment gateway:
- Payment gateways impose a fee on every single transaction. The transaction costs charged by a payment gateway should be kept to a minimum if a company plans to use it.
- In terms of safety, the payment gateway should be PCI DSS compliant. This implies that it complies with the latest international regulations for securing customers’ personal information.
- The payment gateway should be simple to include in the company’s online presence.
- The payment gateway must provide responsive and helpful customer service in case of any problems.
2. Open a business bank account.
To accept credit card payment online, businesses need a “merchant account.” To begin accepting credit card payments, businesses need to register a merchant account with a bank or a payment service provider.
Business owners should submit the following paperwork when applying for a merchant account:
- Documents proving business registration
- Company ID card
- Documentation establishing the owner’s identity
- Documentation of the company’s and owner’s physical address
- Business bank account cancel cheque
After deciding on a payment gateway and creating a merchant account, the next step is to connect the gateway with the company’s website or mobile app. Most gateways for online payments offer straightforward plugins or application programming interfaces (APIs) that may be incorporated into the site or programme in consideration.
Companies must ensure a smooth and error-free payment gateway connection. Before going live, it is crucial to put the payment gateway through its paces.
3. Include safe methods of payment.
While making purchases online, safety should always come first. Businesses are responsible for protecting their customers’ financial information by facilitating secure payment methods.
Also Read: Know about types of Credit Card in India
Using SSL encryption protects sensitive client information while in transit from the app or website to the payment processor. Using a unique code texted to the customer’s mobile phone, two-factor authentication increases the safety of the transaction. Tokenisation is substituting a randomly generated identifier for personally identifiable information before submitting it to the payment gateway for safekeeping.
4. Provide a variety of payment methods.
When it comes to making purchases, customers have varying preferences. Thus, businesses need to accept various payment methods, including but not limited to credit cards, debit cards, net banking, UPI, and digital wallets.
Businesses may attract a wider audience and make purchases more convenient for customers by accepting various payment methods.
5. Put out transparent billing practices.
Websites and mobile apps must prominently reflect the company’s payment policies. Fees, refunds, and payment due dates should be listed there. This ensures that the payment procedure does not mislead clients and that potential disagreements are settled amicably.
Transactions Made with Credit Cards vs. Debit Cards
Credit and debit card purchases may appear identical from the outside, but they function differently behind the scenes. As both are processed through credit card networks, the corresponding point-of-sale procedures are identical: the customer provides payment information, the terminal contacts the bank, and the transaction is completed.
Debit card transactions immediately deduct the purchase amount from the customer’s bank account, while online credit card transactions do not. How money transfers across to you may look different. The funds from a debit card transaction will often be deposited into your merchant account the next business day. With credit card processing, it can extend to several days for the payment processor to deposit funds into your account (and then settle with the consumer).
Furthermore, your payment service provider’s fee structure may vary based on whether you use their debit or credit card services.
Difference Between a Merchant Account and a Payment Processing Service
In the past, accepting credit card payments included setting up a specialised bank account known as a “merchant account.” If you wanted to accept payments, you’d have to sign up with a bank, negotiate a contract with the bank’s fees, and obtain or buy the appropriate hardware.
This is greatly simplified and frequently reduced in cost by using a payment service like PayPal, Square, Stripe, and others. These resemble merchant accounts but are much simpler to open and control digitally. In addition, transferring money into or out of your PSP account to make purchases, issue refunds, or deposit into a bank account is simple.
If you’re starting, using a payment service provider to take credit card payments is the easiest and least expensive option for your small business.