In this article, we’ll discuss the software alternatives for receiving payments online, some of which are free, as well as how payment processing may help your company run more efficiently and generate more revenue.

Let’s first go over the fundamentals of how payment processing works.

What is payment processing?
A company known as a payment processor helps businesses and banks exchange money electronically (through ACH, digital wallets, and credit cards). In short, payment processors manage all of the behind-the-scenes arrangements between retailers, banks, and credit card companies that make it possible for businesses to accept payments.

How does the processing of payments work?
When you use a credit card to purchase at a store, the payment processor works behind the scenes to validate and execute the transaction, transferring the funds from your account to the store’s account.

Here is what takes place when a client uses a credit card to pay:

To make a transaction, a consumer hands over their credit or debit card to the retailer. A physical payment terminal or an online payment page is used for this.

The payment processor receives the card information after it passes via a payment gateway or portal that encrypts the customer’s personal information to protect privacy.

The payment processor subsequently requests the customer’s issuing bank to confirm that the consumer has sufficient credit (or cash if using a debit card) to cover the transaction.

The card issuer either accepts or rejects the transaction.

To complete the transaction with the consumer, the payment processor transmits this “approved” or “denied” information back to the store.

When everything is completed, the processor instructs the customer’s bank to transfer money to the retailer’s bank.

While this may seem like many steps, it all happens quickly and with little effort on your or the customer’s part.

Benefits of Processing Payments

Here are a few benefits of using payment processing software for your company.

1. Convenience2. Speed
Most payments between buyers and sellers may be promptly transferred thanks to payment processors. However, transfers between bank accounts might sometimes take a day or more.

3. Trust
Many payment processors are well-known international names. Customers are more likely to trust your payment system if they currently use payment software.

4. Safety
Payment processing providers further protect online transactions. Limits, flags for account behavior, and perhaps even a deadline for payment recall may all be imposed.

5. Keeping Records
You may manage your contacts, recurring payments, and other account activities with payment processors from a desktop or mobile device. You will also have online access to your account.

Prices to Take into Account When Using Payment Processors

Payment processors provide advantages such as ease and security, but they also have a price. Banks, credit card issuers, and payment processor all receive a part of the transaction. The transaction costs to watch out for are listed below.

Paying fees to the card issuer is known as an exchange charge (Chase, TD Bank, Bank of America, etc.) A portion of each sale is used to pay the card issuer.

Payment of assessment fees to credit card companies (Visa, Mastercard, Amex).

Fees paid to the processor are referred to as acquirer or processor fees (PayPal, Square, Stripe).

Your merchant bank will get a charge called a “merchant fee.” The number of transactions, sales, and industry will all affect the percentage charged.

The interchange, assessment, and merchant fees are all given as a single % and are combined. The cost of the processor is shown individually. For example, your transaction costs may total 3%, with a $0.20 processing charge for each transaction. It is important to remember when you choose your price structure, which we’ll discuss in the following section.

Structure for Pricing in Payment Processing

The pricing structure, which varies from processor to processor, is a further consideration. This structure often belongs to the following groups:

1. Interchange Plus
With the Interchange Plus price, the shop also pays another cost in addition to the interchange amount. For instance, you would pay $0.25 for each transaction in addition to the 3% interchange charge.

Pros: Compared to other options, this one may be more affordable.

Cons: Due to many exchange rates, prices will vary significantly from one transaction to the next.

2. Fixed-Rate
This set percentage applies to all transactions that are paid in a certain way, regardless of the interchange rate. For instance, you may pay 2% plus $0.20 for in-person transactions and 2.5% plus $0.25 for online goods.

Pros: You may anticipate your charges.

Cons: If you have a significant number of sales, your expenses could be greater than those in the interchange plus model.

3. Tiered
Flat-rate pricing and interchange plus elements are combined in pricing. Interchange rates are divided into tiers or buckets in this arrangement. The processor then gives each tier a cost. According to the tier it was assigned, you may pay fees ranging from $2 to $3 on a $75 purchase, for instance.

Pros: Because hundreds of interchange fees are packaged into preset categories, rates are simpler to grasp, and expenses are more predictable.

Cons: The total expenses may be greater than the other alternatives since the processor determines the tiers.

After outlining the fees, let’s examine some of the top online payment processors available today.

Top Providers for Online Payment Processing

After creating a plan for collecting payments online, you must choose which payment processing company to work with. Eight of the most common choices are listed below:

1. PayPal

Price: $0.49 per transaction + 3.49%.

One of the most reputable and well-known firms for payment processing is PayPal. It’s free to sign up, and they provide you all the resources you need to set up a secure payment gateway for site visitors and incorporate PayPal payments into your website. A platform is a wonderful option for foreign businesses due to its extensive reach.

2. Stripe

2.9% + $0.30 each transaction is the cost.

For online companies, Stripe provides a variety of choices like configurable checkouts, subscription management tools, and recurring payment alternatives. All of the major credit cards, mobile payment applications, wallets, and more are supported by Stripe.

3. Google Pay

Google Pay is free; businesses only pay transaction fees when customers use their credit or debit cards.

Businesses, websites, and applications may use Google Pay’s payment service. The APIs for Google Pay let you provide your consumers a wonderful checkout and payment experience.

The hundreds of millions of cards stored to Google Accounts throughout the globe will be secure and simple to access if you integrate Google Pay into your website. This will allow consumers to pay for your items conveniently and securely.

4. Apple Pay

Cost: Apple Pay is free; businesses only pay transaction fees when customers use their credit or debit cards to make purchases.

Apple Pay may be accessed via apps, websites, retail, Business Chat, and iMessage. It enables Apple users to enter contact, financial, and shipping information during checkout swiftly and securely.

With Apple Pay, clients of your online store can check out instantly on apps and websites without having to search for their credit cards. Apple consumers just need to choose “Apple Pay” as their payment method on a website, confirm the transaction with a single touch (on their iPhone, Apple Watch, etc.), and they are ready to go.

5. HubSpot Payments

Flat rate of 2.9% for credit cards or 0.5% for ACH

Your payment processor and sales and marketing tools are integrated via HubSpot Payments. Directly from your website, you may take credit cards, debit cards, or ACH/eChecks. Alternatively, include payment URLs in your bills, emails, and texts. Additionally, since it connects with your CRM, you can build up automatic processes to immediately update the records of your customers with information about their purchases and payment activities.

Users of the Sales Hub simply pay the flat transaction costs; there are no additional or monthly expenses.

6. Square

2.9% + $0.30 each transaction is the cost.

By developing a dongle that retailers could plug into their mobile phones to take credit card payments, Square joined the payment processing industry.

Since then, they’ve improved their software to accommodate all the main methods of payment processing and several practical features for both brick-and-mortar shops and internet retailers.

Even better, you can integrate all of their point-of-sale (POS) technologies while building a simple website for free. Additionally, they provide premium solutions for a unique website.

7. Venmo For Business

Price: $0.10 of the payment + 1.9%.

PayPal owns the mobile payment system and app known as Venmo For Business. Users may opt to make payments using your website or mobile app.

On Venmo, you can create a business profile so that people can locate you easily. Additionally, if you integrate Venmo with your website, it will show up as a payment choice next to the PayPal payment option.

The consumer will be sent to their Venmo app to finish the transaction after choosing the Venmo option at checkout. You may add the Venmo payment option to any of your e-commerce website’s pages that already display the PayPal payment option, such as the product pages, shopping cart pages, and checkout pages.

8. Helcim

Helcim is an online payment option for e-commerce companies; you can use it to launch a new online shop or include a payment option on an existing website.

Thanks to Helcim’s API, the user-friendly and secure online payment system may be integrated into your website, shopping cart, invoicing system, and/or app. Helcim operates over the phone, in person, and by invoice in addition to online and via apps. It also connects with your accounting software to save you time when it comes to bookkeeping.

Let’s discuss the procedures for collecting money online next.

How to Take Online Payments

1. Secure Gateway
There are many approaches you may use when developing a safe online payment gateway. To establish a custom gateway, you may either work with your website development team or employ an outside developer. Alternatively, you might utilize outside software.

It’s crucial to set up a secure gateway. Additionally, you are implementing automated procedures, which will reduce the amount of time needed for human processing, particularly as your organization expands and more transactions are handled.

The bigger the audience and the simpler it will be for your clients to give you money, the more payment options you have access to inside your payment gateway.

2. Make credit and debit card transactions easier
Using debit/credit cards is still the most common method of paying for goods and services online, however, this may change as mobile payments become more common.

Through well-known payment processors like PayPal or Stripe, receiving credit card payments is simple. These will take the three credit cards that are most commonly used worldwide: Visa, MasterCard, and American Express.

3. Arrange regular payments
Recurring billing is the most effective and dependable method of invoicing and receiving payments if you provide subscription plans or continuous monthly services.

Many of the popular payment processing programs also include recurring billing capabilities. For instance, Growth Marketing Pro created an SEO tool and set it up with Stripe to charge users every month.

If you already have a payment processing system, websites like Pay simple also provide tools to set up personalized, automatic recurring invoicing.

Automation should be used. Most human mistakes are eliminated, as well as the strain of keeping track of invoices and payments.

With only a few clicks, your consumers may agree to regular payments, and you won’t need to manually monitor your client base.

4. Accept payment through mobile
In addition, mobile payment applications are more practical than ever. Nowadays, consumers are often more likely to have their phones on hand than debit cards.

For instance, Apple Pay has rapidly risen to the top of the list of mobile payment methods used in the US. If you didn’t accept Apple Pay, you’d lose out on its projected 43.9 million users.

Additionally, smartphone applications like Google Pay, Venmo, and PayPal have a respectable market share.

5. Use email invoicing
A proactive technique to solicit money is via email invoicing. A payment form may be sent through email, or you can include a link that takes the receiver to a payment site.

There are a few problems with this approach, though: Since email isn’t the most trustworthy method of communication, clients may lack confidence while making payments by email.

Although it’s a crucial component of payment processing for many firms, expect a failure rate.

6. Recognize digital checks (eChecks)
You need a form the user can fill out, which you can view using payment processing software, to accept eChecks as payment.

Essentially, it’s a method of online check payment. Offering this to your clients can streamline the process since it’s a faster and more dependable alternative than mailing a paper check via the mail.

7. Accept cryptocurrency payments
If you’re comfortable dealing with cryptocurrency, it’s a chance to reach a larger internet audience.

Sites like Bitpay provide you with all the resources you need to receive crypto payments using go-through applications, issue invoices, request payments, and accept cryptocurrency payments online.

The decentralized nature of cryptocurrencies makes them a special kind of transaction for enterprises. No currency conversion or bank handling costs apply when you take payments from anywhere globally. The possibility of deception is likewise diminished.

8. Use payment links
Payment links connect to customized payment forms using safe, shareable URLs or QR codes. Emails, messages, chats, and IM applications may all be added. For quicker payments, you may even incorporate them right into bids and invoices.

Start Accepting Payments Online for Free

The most crucial aspect, regardless of the payment processing software you use, is making it simple for the consumer to pay. Additionally, your consumers are more likely to complete a transaction if they have various payment options.

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