 Payment gateways and the tools for e-commerce accounting. Understanding how to start collecting money on your e-commerce platform.
With many businesses these days turning to online platforms such as Shopify, Squarsepace, Wix, Woo Commerce, Amazon, and beyond, it’s no question e-commerce accounting is a major question surrounding small business owners. Questions about what’s the best website to use, what’s the lowest rate on transactions, and where to use your e-commerce payment gateways are all great questions to ask. In this post we will review what payment gateways are, how they work, and ways to help you decide what system is right for you! How Payment Gateways work? First, payment gateways are in essence a way for you as a business owner to charge and collect payment for goods sold online. They are designed to make payment-processing effective, secure, and hassle-free. Once a customer places an order on an e-commerce website, they enter their credit card information and the data is sent between them and the merchants web server. The gateway sends that data to the payment processor used by the merchants acquiring bank. Then, the payment processes sends that over to the credit issuer (bank) and says “approved” or “denied.” That outcome either allows the transaction to proceed or stops it. When approved, the transaction is approved, payment is taken then moved over to the merchant and a sale is deemed “complete.” You can now see why a payment gateway is such a multi-step process. What payment gateways exist? PayPal, Stripe, Payline, 2Checkout are just a few of the most common names for payment gateway processing companies. Many of these gateways integrate with online platforms such as Shopify, Weebly, Squarespace, Wix, WooCommerce, and more. But how do you decide? It may come down to what you are needing the gateway to handle (total sales, integrations, and other features) and of course the cost of using such platforms. Here is a real condensed breakdown of the platforms and their differences when looking at transaction fees:
Considerations when choosing a payment gateway Before you make a decision on which payment gateway platform you want to go with, you should consider some key factors:
When choosing a payment gateway it’s a good idea to compare all the benefits and features, to ensure it meets all the requirements of your business. Implementing a platform Once you have identified what online commerce platform you want to use, you can then see what payment gateway integrations they support. If you are leaning towards PayPal, for instance, you’d want to check what e-commerce platforms support and integrate with PayPal. If the platform you use to manage your e-commerce store supports the integration, you may have just found your perfect match.Each payment gateway will need to be setup by you and the business before you can start collecting payment, however once setup you can begin using that payment gateway in the various store settings you run. Choosing a payment gateway can feel overwhelming because of the number of platforms out there, the varying fee structures, and the wonder of so and so website will integrate. It’s important to break it down to a numbers game when comparing and see what makes the most sense as you grow and scale your brand. The upside is that with so many options, competition will help drive user preferences and provide you with a wealth of options. Payment gateways and the tools for e-commerce accounting. Understanding how to start collecting money on your e-commerce platform. With many businesses these days turning to online platforms such as Shopify, Squarsepace, Wix, Woo Commerce, Amazon, and beyond, it’s no question e-commerce accounting is a major question surrounding small business owners. Questions about what’s the best website to use, what’s the lowest rate on transactions, and where to use your e-commerce payment gateways are all great questions to ask. In this post we will review what payment gateways are, how they work, and ways to help you decide what system is right for you! How Payment Gateways work? First, payment gateways are in essence a way for you as a business owner to charge and collect payment for goods sold online. They are designed to make payment-processing effective, secure, and hassle-free. Once a customer places an order on an e-commerce website, they enter their credit card information and the data is sent between them and the merchants web server. The gateway sends that data to the payment processor used by the merchants acquiring bank. Then, the payment processes sends that over to the credit issuer (bank) and says “approved” or “denied.” That outcome either allows the transaction to proceed or stops it. When approved, the transaction is approved, payment is taken then moved over to the merchant and a sale is deemed “complete.” You can now see why a payment gateway is such a multi-step process. What payment gateways exist? PayPal, Stripe, Payline, 2Checkout are just a few of the most common names for payment gateway processing companies. Many of these gateways integrate with online platforms such as Shopify, Weebly, Squarespace, Wix, WooCommerce, and more. But how do you decide? It may come down to what you are needing the gateway to handle (total sales, integrations, and other features) and of course the cost of using such platforms. Here is a real condensed breakdown of the platforms and their differences when looking at transaction fees:
Considerations when choosing a payment gateway Before you make a decision on which payment gateway platform you want to go with, you should consider some key factors:
When choosing a payment gateway it’s a good idea to compare all the benefits and features, to ensure it meets all the requirements of your business. Implementing a platform Once you have identified what online commerce platform you want to use, you can then see what payment gateway integrations they support. If you are leaning towards PayPal, for instance, you’d want to check what e-commerce platforms support and integrate with PayPal. If the platform you use to manage your e-commerce store supports the integration, you may have just found your perfect match.Each payment gateway will need to be setup by you and the business before you can start collecting payment, however once setup you can begin using that payment gateway in the various store settings you run. Choosing a payment gateway can feel overwhelming because of the number of platforms out there, the varying fee structures, and the wonder of so and so website will integrate. It’s important to break it down to a numbers game when comparing and see what makes the most sense as you grow and scale your brand. The upside is that with so many options, competition will help drive user preferences and provide you with a wealth of options.
6 Comments
4/12/2020 04:06:35 pm
The gateway sends that data to the payment processor used by the merchants acquiring bank. Then, the payment processes sends that over to the credit issuer (bank) and says “approved” or “denied.” That outcome either allows the transaction to proceed or stops it. When approved, the transaction is approved, payment is taken then moved over to the merchant and a sale is deemed “complete.” You can now see why a payment gateway is such a multi-step process. 6/14/2020 03:11:08 am
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